New York-New York-860 Broadway Lease - Lautob Realty Co. and Scient Corp.
STANDARD FORM OF LOFT LEASE
THE REAL ESTATE BOARD OF NEW YORK, INC.
Agreement of Lease, made as of this 28th day of October 1998, between Lautob
Realty Company, a New York limited partnership having an office c/o Gordon &
Gordon, 135 Fifth Avenue, New York, New York 11010 party of the first part,
hereinafter referred to as OWNER, and Scient Corporation, a California
corporation having an office at 720 California Street, San Francisco, California
94108-2404
party of the second part, hereinafter referred to as TENANT,
Witnesseth: Owner hereby leases to Tenant and Tenant hereby hires from Owner
the entire rentable portion of the 3rd floor and the 4th floor
in the building known as 860 Broadway
in the Borough of Manhattan, City of New York, for the term, and at the rent set
forth in Article 42,
which Tenant agrees to pay in lawful money of the United States which shall be
legal tender in payment of all debts and dues, public and private, at the time
of payment, in equal monthly installments in advance on the first day of each
month during said term, at the office of Owner or such other place as Owner may
designate, without any set off or deduction whatsoever, except that Tenant shall
pay the first monthly installment, coming due pursuant to the terms of this
lease after any rent abatement period on the execution hereof (unless this lease
be a renewal).
The parties hereto, for themselves, their heirs, distributees, executors,
administrators, legal representatives, successors and assigns, hereby covenant
as follows:
RENT:
1. Tenant shall pay the rent as above and as hereinafter provided.
OCCUPANCY:
2. Tenant shall use and occupy, demised premises for executive and general
offices in connection with Tenant's business
provided such use is in accordance with the certificate of occupancy for the
building, if any, and for no other purpose.
ALTERATIONS:
3. Tenant shall make no changes in or to the demised premises of any nature
without Owner's prior written consent. Subject to the prior written consent of
Owner, and to the provisions of this article, Tenant, at Tenant's expense, may
make alterations, installations, additions or improvements which are
nonstructural and which do not affect utility services or plumbing and
electrical lines, in or to the interior of the demised premises using
contractors or mechanics first approved in each instance by Owner, which
approval shall not be unreasonably withheld, conditioned or delayed.
Notwithstanding anything to the contrary contained in this lease, Tenant may
perform such non-structural Tenant's Work (as hereinafter defined) at the
demised premises costing up to $50,000.00 in each period of 12 consecutive
months during the term of this lease without submitting plans for, or obtaining,
Owner's consent; provided, that such Tenant's Work (a) does not adversely affect
the systems of the building, (b) does not legally require the filing of plans
with any governmental agency, (c) otherwise complies with the provisions of
Article 63 and (d) shall be subject to prior notice thereof to Owner and Tenant
shall submit such reasonable documents and information as shall be reasonably
requested by Owner. Tenant shall, at its expense, before making any Alterations,
additions, installations or improvements obtain all permits, approval and
certificates required by any governmental or quasi-governmental bodies and (upon
completion) certificates of final approval thereof and shall deliver promptly
duplicates of all such permits, approvals and certificates to Owner. Tenant
agrees to carry and will cause Tenant's contractors and sub-contractors to carry
such workman's compensation, general liability, personal and property damage
insurance as Owner may reasonably require. If any mechanic's lien is filed
against the demised premises, or the building of which the same forms a part for
work claimed to have been done for, or materials furnished to, Tenant, whether
or not done pursuant to this article, the same shall be discharged by Tenant
within thirty days after Tenant's receipt of written notice thereof, at Tenant's
expense, by payment or filing the bond required by law or otherwise. All
fixtures and all paneling, partitions, railings and like installations,
installed in the premises any time, either by Tenant or by Owner on Tenant's
behalf, shall, upon installation, become the property of Owner and shall remain
upon and be surrendered with the demised premises unless Owner, by notice to
Tenant no later than twenty days prior to the date fixed as the termination of
this lease, elects to relinquish Owner's right thereto and to have them removed
by Tenant, in which event the same shall be removed from the demised premises by
Tenant prior to the expiration of the lease, at Tenant's expense. Nothing in
this Article shall be construed to give Owner title to or prevent Tenant's
removal of trade fixtures, moveable office furniture and equipment (including,
without limitation, any computer installation and servers, phone systems and
associated equipment), but upon removal or any such from the premises or upon
removal of other installations as may be required by Owner, Tenant shall
immediately and at its expense repair any damage to the demised premises or the
building due to such removal. All property permitted or required to be removed
by Tenant at the end of the term remaining in the premises after Tenant's
removal shall be deemed abandoned and may, at the election of Owner, either be
retained as Owner's property or removed from the premises by Owner, at Tenant's
expense. Notwithstanding anything to the contrary contained in this lease, upon
the expiration or earlier termination of the term of this lease, Tenant shall
not be required to restore the demised premises to its condition prior to the
performance of Tenant's Work, except if, and to the extent, such restoration is
requested by Owner at the time of the performance of such Tenant's Work.
REPAIRS:
4. Owner shall maintain and repair the exterior of and the public portions
of the building, and the structural portions of the building (including, without
limitation, the structural portions within the demises premises) and the
building's plumbing, electrical, heating and elevator systems serving the
demised premises (excluding any located within the demised premises which solely
service the demised premises (such as the air-conditioning system), the
foregoing to be maintained and repaired by Tenant). Tenant shall, throughout the
term of this lease, take good care of the demised premises including the
bathrooms and lavatory facilities (if the demised premises encompass the entire
floor of the building) and the windows and window frames and the fixtures and
appurtenances therein and at Tenant's sole cost and expense promptly make all
repairs thereto and to the building, whether structural or non-structural in
nature, to the extent caused by or resulting from the carelessness, omission,
neglect or improper conduct of Tenant, Tenant's servants, employees, invitees,
or licensees, and whether or not arising from such Tenant conduct or omission,
when required by other provisions or this lease, including Article 6. Tenant
shall also repair all damage to the building and the demised premises caused by
the moving of Tenant's fixtures, furniture or equipment. All the aforesaid
repairs shall be of quality or class equal to the original work or construction.
If Tenant fails, after twenty days notice, to proceed with due diligence to make
repairs required to be made by Tenant, the same may be made by the Owner at the
expense of Tenant and the expenses thereof Incurred by Owner shall be
collectible, as additional rent, after rendition of a bill or statement
therefor. Once Tenant has commenced such repair within such period, Tenant shall
diligently prosecute the same to completion. If the demised premises be or
become infested with vermin, Tenant shall, at its expense, cause the same to be
exterminated. Tenant shall give Owner prompt notice of any defective condition
in any plumbing, heating system or electrical lines located in the demised
premises and following such notice (and to the extent the same is Owner's
responsibility under this lease), Owner shall remedy the condition with due
diligence, but at the expense of Tenant if repairs are necessitated by damage or
injury attributable to Tenant, Tenant's servants, agents, employees, invitees or
licensees as aforesaid. Except as specifically provided in Article 9 or
elsewhere in this lease, there shall be no allowance to the Tenant for a
diminution of rental value and no liability on the part of Owner by reason of
inconvenience, annoyance or injury to business arising from Owner, Tenant or
others making or failing to make any repairs, alterations, additions or
Improvements in or to any portion or the building or the demised premises or in
and to the fixtures, appurtenances or equipment thereof. It is specifically
agreed that Tenant shall not be entitled to any set off or reduction of rent by
reason of any failure or Owner to comply with the covenants of this or any other
article or this lease. Tenant agrees that Tenant's sole remedy at law in such
instance will be by way or any action for damages for breach or contract. The
provisions or this Article 4 with respect to the making of repairs shall not
apply In the case or fire or other casualty with regard to which Article 9
hereof shall apply. Notwithstanding anything to the contrary contained in this
lease, Tenant shall not be responsible for any damage or injury to the demised
premises or the building caused by or resulting from the negligence or willful
misconduct of Owner, its agents, employees or contractors.
WINDOW CLEANING:
5. Tenant will not clean nor require, permit, suffer or allow any window in
the demised premises to be cleaned from the outside in violation of Section 202
of the New York State labor law or any other applicable law or of the Rules of
the Board of Standards and Appeals, or of any other Board or body having or
asserting Jurisdiction.
REQUIREMENTS OF LAW, FIRE INSURANCE:
6. Prior to the commencement or the lease term, if Tenant is then in
possession, and at all times thereafter Tenant shall, at Tenant's sole cost and
expense, promptly comply with all present and future laws, orders and
regulations of all state, federal, municipal and local governments, departments,
commissions and boards and any direction of any public officer pursuant to law,
and all orders, rules and regulations of the New York Board of Fire
Underwriters, or the Insurance Services Office, or any similar body which shall
impose any violation, order or duty upon Owner or Tenant with respect to the
demised premises, whether or not arising out or Tenant's use or manner of use
thereof, or, with respect to the building, if arising out of Tenant's use or
manner of use of the demised premises of the building (including the use
permitted under the lease). Except as provided in Article 30 hereof, nothing
herein shall require Tenant to make structural repairs or alterations, unless
Tenant has, by its manner of use of the demised premises or method of operation
therein, violated any such laws, ordinances, orders, rules, regulations or
requirements with respect thereto. Except for Tenant's obligations specified in
this Article, Owner shall promptly comply with all other governmental laws,
rules, orders, regulations, ordinances and building, fire or health codes or
other similar requirements affecting the building which require structural
repairs to or structural alteration of the building or the demised premises;
provided, and to the extent, that a violation and enforcement of the same would
prevent Tenant from using the demised premises for the purposes contemplated by
this lease. Tenant shall not do or
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permit any act or thing to be done in or to the demised premises which is
contrary to law, or which will invalidate or be in conflict with public
liability, fire or other policies of insurance at any time carried by or for the
benefit of Owner. Tenant shall not keep anything in the demised premises except
as now or hereafter permitted by the Fire Department, Board of Fire
Underwriters, Fire Insurance Rating Organization and other authority having
jurisdiction, and then only in such manner and such quantity so as not to
increase the rate for fire Insurance applicable to the building, nor use the
premises in a manner which will increase the insurance rate for the building or
any property located therein over that in effect prior to the commencement of
Tenant's occupancy. If by reason of failure to comply with the foregoing the
fire Insurance rate shall, at the beginning of this lease or at any time
thereafter, be higher than it otherwise would be, then Tenant shall reimburse
Owner, as additional rent hereunder, for that portion of all fire insurance
premiums thereafter paid by Owner which shall have been charged because of such
failure by Tenant. In any action or proceeding wherein Owner and Tenant are
parties, a schedule or "make-up" or rate for the building or demised premises
issued by a body making fire insurance rates applicable to said premises shall
be conclusive evidence of the facts therein stated and of the several items and
charges in the fire insurance rates then applicable to said premises. Tenant
shall not place a load upon any floor of the demised premises exceeding the
floor load per square foot area which it was designed to carry and which is
allowed by law. Owner reserves the right to prescribe the weight and position of
all safes, extra-heavy business machines and mechanical equipment. Such
installations shall be placed and maintained by Tenant, at Tenant's expense, in
settings sufficient, in Owner's reasonable judgement, to absorb and prevent
unreasonable vibration, noise and annoyance.
SUBORDINATION:
7. This lease is subject and subordinate to all ground or underlying,
leases and to all mortgages which may now or hereafter affect such leases or the
real property of which demised premises are a part and to all renewals,
modifications, consolidations, replacements and extensions of any such
underlying leases and mortgages. This clause shall be self-operative and no
further instrument or subordination shall be required by any ground or
underlying lessor or by any mortgagee, affecting any lease or the real property
of which the demised premises are a part. In confirmation of such subordination,
Tenant shall from time to time execute promptly any certificate that Owner may
request.
TENANT'S LIABILITY INSURANCE PROPERTY LOSS, DAMAGE, INDEMNITY:
8. Owner or its agents shall not be liable for any damage to property of
Tenant or of others entrusted to employees of the building, nor for loss of or
damage to any property of Tenant by theft or otherwise, nor for any injury or
damage to persons or property resulting from any cause of whatsoever nature,
unless caused by or due to the negligence or willful misconduct of Owner, its
agents, servants or employees; Owner or its agents shall not be liable for any
damage caused by other tenants or persons in, upon or about said building or
caused by operations in connection of any private, public or quasi public work.
If at any time any windows of the demised premises are temporarily closed,
darkened or bricked up (or permanently closed, darkened or bricked up, if
required by law) for any reason whatsoever (other than by Owner's arbitrary or
unreasonable acts). Owner shall not be liable for any damage Tenant may sustain
thereby and Tenant shall not be entitled to any compensation therefor nor
abatement or diminution of rent nor shall the same release Tenant from its
obligations hereunder nor constitute an eviction. Tenant shall indemnify and
save harmless Owner against and from all liabilities, obligations, damages,
penalties, claims, costs and expenses for which Owner shall not be reimbursed by
insurance, including reasonable attorney's fees, paid; suffered or incurred as a
result of any breach by Tenant, Tenant's agents, contractors, employees,
invitees, or licensees, of any covenant or condition of this lease, or the
carelessness, negligence or Improper conduct of the Tenant, Tenant's agents,
contractors, employees, invitees or licensees. Tenant's liability under; this
lease extends to the acts and omissions of any sub-tenant, and any agent,
contractor, employee, invitee or licensee of any subtenant In case any action or
proceeding is brought against Owner by reason of any such claim, Tenant, upon
written notice from Owner, will, at Tenant's expense, resist or defend such
action or proceeding by counsel approved by Owner in writing, such approval not
to be unreasonably withheld or delayed.
DESTRUCTION, FIRE AND OTHER CASUALTY:
9. (a) If the demised premises or any part thereof shall be damaged by fire
or other casualty, Tenant shall give immediate notice thereof to Owner and this
lease shall continue in full force and effect except as hereinafter set forth.
(b) If the demised premises are partially damaged or inaccessible or rendered
partially unusable by fire or other casualty, the damages thereto shall be
repaired by and at the expense of Owner and the rent and other items of
additional rent, until such repair shall be substantially completed, shall be
apportioned from the day following the casualty according to the part of the
premises which is usable; provided, that if the portion of the demised premises
which is not damaged cannot reasonably and economically be operated by Tenant
for its business, and Tenant ceases to operate its business in the demised
premises, then the fixed rent and additional rent payable hereunder shall be'
fully abated until the substantial completion of the restoration of the demises
premises and if either (i) such damage occurs during the last year of the term
of this lease or (ii) the restoration of the building is not substantially
completed within ten months following the casualty, then Tenant shall have the
right to terminate this lease on thirty days' notice to Owner (which notice of
termination must, in any event, be given within ten days after the event
entitling Tenant to terminate this lease). This lease shall terminate at the end
of such thirty days as if that date was the expiration date specified in this
lease; provided, that (in the case of the failure to substantially complete the
restoration) if the restoration of the building is substantially completed
before such termination date, then this lease shall continue in full force and
effect. (c) If the demised premises are totally damaged or rendered wholly
unusable or inaccessible by fire or other casualty, then the rent and other
items of additional rent as hereinafter expressly provided shall be
proportionately paid up to the time of the casualty and thenceforth shall cease
until the date when the premises shall have been repaired and restored by Owner
(or sooner reoccupied in part by Tenant then rent shall be apportioned as
provided in subsection (b) above), subject to Owner's right to elect not to
restore the same as hereinafter provided. Within sixty days after the occurrence
of the fire or other casualty at the building, Owner shall deliver to Tenant a
good faith estimate of the period of time which will be needed to substantially
restore the building. If (1) the period of time set forth in such estimate shall
exceed ten months from the occurrence of the fire or other casualty or (2)
notwithstanding the time period set forth in the estimate, the restoration of
the building is not substantially completed within ten months following the
casualty, then Tenant shall have the right to terminate this lease on thirty
days notice to Owner (which notice of termination must, in any event, be given
without ten days after the event entitling Tenant to terminate to lease). This
lease shall terminate at the end of such thirty days as if that date was the
expiration date specified in this lease; provided, that (in the case of the
failure to substantially complete the restoration) if the restoration of the
building is substantially completed before such termination date, then this
lease shall continue in full force and effect. (d) If the demised premises are
rendered wholly unusable or (whether or not the demised premises pro damaged in
whole or in part) if the building shall be so damaged that Owner shall decide to
demolish it or to rebuild it, then, in any of such events, Owner may elect to
terminate this lease by written notice to Tenant, given within 90 days after
such fire or casualty specifying a date for the expiration of the lease, which
date shall not be: more than 60 days after the giving of such notice, and upon
the date specified in such notice the term of this lease shall expire as fully
and completely as if such date were the date set forth above for the termination
of this lease and Tenant shall forthwith quit, surrender and vacate the premises
without prejudice however, to Owner's rights and remedies against Tenant under
the lease provisions in effect prior to such termination, and any rent owing
shall be paid up to such date and any payments of rent made by Tenant which were
on account of any period subsequent to such date shall be returned to Tenant.
Unless Owner shall serve a termination notice as provided for herein, Owner
shall make the repairs end restorations under the conditions of (b) and (c)
hereof, with all reasonable expedition, subject to delays due to adjustment of
insurance claims, labor troubles and causes beyond Owner's control. After any
such casualty, Tenant shall cooperate with Owner's restoration by removing from
the premises as promptly as reasonably possible, all of Tenant's Salvageable
inventory and movable equipment, furniture, and other property. Tenant's
liability for rent shall resume five (5) days after written notice from Owner
that the premises are substantially ready for Tenant's occupancy. (c) Nothing
contained hereinabove shall relieve Tenant from liability that may exist as a
result of damage from fire or other casualty. Notwithstanding the foregoing,
including Owner's obligation to restore under subparagraph (b) above, each party
shall look first to any insurance in its favor before making any claim against
the other party for recovery for loss or damage resulting From fire or other
casualty, and to the extent that such insurance is in force and collectible and
to the extent permitted by law, Owner and Tenant each hereby releases and waives
all right of recovery with respect to subparagraphs (b), (d) and (e) above,
against the other or any one claiming through or under each of them by way of
subrogation or otherwise. The release and waiver herein referred to shall be
deemed to include any loss or damage to the demised premises and/or to any
personal property, equipment, trade fixtures, goods and merchandise located
therein. The foregoing release and waiver shall be in Force only if both
releasers' insurance policies contain a clause providing that such a release or
waiver shall not invalidate the insurance. If, and to the extent, that such
waiver can be obtained only by the payment of additional premiums, then the
party benefiting from the waiver shall pay such premium within ten days after
written demand or shall be deemed to have agreed that the party obtaining
insurance coverage shall be free of any further obligation under the provisions
hereof with respect to waiver of subrogation, Tenant acknowledges that Owner
will not cony insurance on Tenant's furniture and or furnishings or any fixtures
or equipment, improvements, or appurtenances removable by Tenant and agrees that
Owner will not be obligated to repair any damage thereto or replace the same.
(f) Tenant hereby waives the provisions of Section 227 of the Real Property Law
and agrees that the provisions of this article shall govern and control in lieu
thereof.
EMINENT DOMAIN:
10. If the whole or any part of the demised premises shall be acquired or
condemned by Eminent Domain for any public or quasi public use or purpose, then
and in that event, the term of this lease shall cease and terminate from the
date of title vesting in such proceeding and Tenant shall have no claim for the
value or any unexpired term of said lease. Tenant shall have the right to make
an independent claim to the condemning authority for the value of Tenant's
moving expenses and personal property, trade fixtures and equipment provided
Tenant is entitled pursuant to the terms of the lease to remove such property,
trade fixtures and equipment at the end of the term and provided farther such
claim does not reduce Owner's award.
ASSIGNMENT, MORTGAGE, ETC.:
11. Except as otherwise set forth in this lease, Tenant, for itself, its
heirs, distributees, executors, administrators, legal representatives,
successors and assigns; expressly covenants that it shall not assign by
operation of law or otherwise, mortgage or encumber this agreement, nor underlet
or suffer or permit the demised premises or any part thereof to be used by
others, without the prior written consent of Owner in each instance. Except as
otherwise set forth in this lease, transfer the majority of the stock of a
corporate Tenant or the majority partnership interest of a partnership Tenant
shall be deemed an assignment. If this lease be assigned, or if the demised
premises or any part thereof be underlet or occupied by anybody other than
Tenant, Owner may, after default by Tenant, collect rent from the assignee,
under-tenant or occupant, and apply the net amount collected to the rent herein
reserved, but no such assignment underletting, occupancy or collection shall be
deemed a waiver of this covenant, or the acceptance or the assignee, under-
tenant or occupant as tenant, or a release of Tenant from the further
performance by Tenant of covenants on the part or Tenant' herein contained. The
consent by Owner to an assignment or underletting shall not in any way be
construed to relieve Tenant from obtaining the express consent in writing
(pursuant to this lease) of Owner to any further assignment or underletting.
ELECTRIC CURRENT:
12. Rates and conditions in respect to submetering or rent inclusion, as
the case may be, to be added in RIDER attached hereto. Tenant covenants and
agrees that at all times its use of electric current shall not exceed the
capacity of existing feeders to the building or the risers or wiring
installation and Tenant may not use any electrical equipment which, In Owner's
opinion, reasonably exercised, will overload such installations or interfere
with the use thereof by other tenants of the building. The change at any time of
the character of electric service provided by a public utility company or any
other third-party provider of electric service shall in no way make Owner liable
or responsible to Tenant, for any loss, damages or expenses which Tenant may
sustain.
ACCESS TO PREMISES:
13. Owner or Owner's agents shall have the right (but shall not be
obligated) to enter the demised premises in any emergency at any time, and at
other reasonable times upon one business days' prior notice to Tenant, which any
be given orally, to examine the same and to make such repairs, replacements and
improvements as Owner may deem necessary and reasonably desirable to any portion
of the building or which Owner may elect to perform in the premises after
Tenant's failure to make repairs or perform any work which Tenant is obligated
to perform under this lease, or for the purpose of complying with laws,
regulations and other directions of governmental authorities. Tenant shall
permit Owner to use and maintain and replace pipes and conduits in and through
the demised premises and to erect new pipes and conduits therein provided,
wherever possible, they are within walls, floors or ceilings and concealed
thereby, and do not reduce the usable square footage area of the demised
premises (except by a minor amount). Owner may, during the progress of any work
in the demised premises, take all necessary materials and equipment into said
premises without the same constituting an eviction nor shall the Tenant be
entitled to any abatement of rent while such work is in progress nor to any
damages by reason of loss or interruption of business or otherwise.
Notwithstanding anything to the contrary contained in this lease, during the
exercise of any right of entry into the demised premises or making of any
repairs, replacements or improvements or performing any work in the demised
premises under any of the provisions of this lease (including, without
limitation, Article 4 of this lease), Owner shall use commercially reasonable
efforts, under the existing circumstances to minimize unreasonable interference
with the conduct of Tenant's business at the demised premises and use of the
demised premises by Tenant; provided, that Owner shall not be obligated to
employ overtime services or incur material expenses in connection therewith.
Throughout the term hereof Owner shall have the right to enter the demised
premises at reasonable hours upon one business days' prior notice to Tenant,
which may be given orally, for the purpose of showing the same to prospective
purchasers or mortgagees of the building, and during the last six months of the
term for the purpose of showing the same to prospective tenants and may, during
said six months period; place upon
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the demised premises the usual notices "To Let" and "For Sale" which notices
Tenant shall permit to remain thereon without molestation. In an emergency or
upon one business days' prior notice, which may be given orally, if Tenant is
not present to open and permit an entry into the demised premises, Owner or
Owner's agents may enter the same whenever such entry may be necessary or
permissible by master key or forcibly and provided reasonable care is exercised
to safeguard Tenant's property, such entry shall not render Owner or its agents
liable therefor, nor in any event shall the obligations or Tenant hereunder be
affected. Notwithstanding the foregoing, Owner shall not forcibly enter the
demised premises except in the event of an actual or perceived emergency or if
required by law or after a default by Tenant under this lease following any
required notice and the expiration of any applicable cure period. If during the
last month or the term Tenant shall have removed all or substantially all of
Tenant's property therefrom. Owner may immediately enter, alter, renovate or
redecorate the demised premises without limitation or abatement or rent, or
incurring liability to Tenant For any compensation and such act shall have no
effect on this lease or Tenant's obligation hereunder.
VAULT, VAULT SPACE, AREA:
14. No Vaults, vault space or area, whether or not enclosed or covered,
not within the property line or the building is leased hereunder anything
contained in or indicated on any sketch, blue print or plan, or anything
contained elsewhere in this lease to the contrary notwithstanding. Owner makes
no reputation as to the location of the property line of the building. All
vaults and vault space and all such areas not within the property line of the
building, which Tenant may be permitted to use and/or occupy, is to be used
and/or occupied under a revocable license, and if any such license be revoked,
or if the amount of such space or area be diminished or required by any Federal,
state or municipal authority or public utility, Owner shall not be subject to
any liability nor shall Tenant be entitled to any compensation or diminution or
abatement or rent, nor shall such revocation, diminution or requisition be
deemed constructive or actual eviction. Any tax, fee or charge of municipal
authorities for such vault or area shall be paid by Tenant, if used by Tenant,
whether or not specifically leased hereunder.
OCCUPANCY:
15. Tenant will not at any time use or occupy the demised premises in
violation or the certificate or occupancy issued For the building or which the
demised premises are a part. Tenant has inspected the premises and accepts them
as is, subject to the riders annexed hereto with respect to Owner's work, if
any. In any event, Owner makes no representation as to the condition or the
premises and Tenant agrees to accept the same subject to violations, whether or
not of record. If any governmental license or permit shall be required for the
proper and lawful conduct of Tenant's business, Tenant shall be responsible for
and shall procure and maintain such license or permit.
BANKRUPTCY:
16. (a) Anything elsewhere in this lease to the contrary notwithstanding,
this lease may be cancelled by Owner by sending of a written notice to
Tenant within a reasonable time after the happening of any one or more or the
Following events: (1) the commencement of a case in bankruptcy or under the laws
of any state naming Tenant as the debtor which is not dismissed within 60 days
after the commencement of the same, or (2) the making by Tenant or an assignment
or any other arrangement For the benefit or creditors under any state statute.
Neither Tenant nor any person claiming through or under Tenant, or by
reason of any statute or order of court, shall thereafter be entitled to
possession of the. premises demised but shall forthwith quit and surrender the
premises. If this lease shall be assigned in accordance with its terms, the
provisions or this Article 16 shall be applicable only to the party then owning
Tenant's interest in this lease.
(b) It is stipulated and agreed that in the event or the termination
of this lease pursuant to (a) hereof, Owner shall Forthwith, notwithstanding any
other provisions of this lease to the contrary, be entitled to recover From
Tenant as and for liquidated damages an amount equal to the difference between
the rental reserved hereunder For the unexpired portion of the term demised and
the fair and reasonable rental value of the demised premises For the same
period. In the computation of such damages the difference between any
installment or rent becoming due hereunder after the date of termination and the
fair and reasonable rental value of the demised premises for the period For
which such installment was payable shall be discounted to the date or
termination at the rate or Four percent (4%) per annum. If such premises or any
part thereof, be relet by the Owner rot the unexpired term of said lease, or any
part thereof, before presentation or proof or such liquidated damages to any
court, commission or tribunal, the amount of rent reserved upon such reletting
shall be deemed to be the fair and reasonable rental value for the part or the
whole or the premises so re-let during the term of the re-letting, Nothing
herein contained shall limit or prejudice the right or the Owner to prove for
and obtain as liquidated damages by reason of such termination, an amount equal
to the maximum allowed by any statute or rule of law in effect at the time when,
and governing the proceedings in which, such damages are to be proved, whether
or not such amount be greater, equal to, or less than the amount of the
difference referred to above.
DEFAULT:
17. (1) If Tenant defaults in fulfilling any of the covenants of this
lease other than the covenants. For the payment of rent or additional rent; or
if the demised premises becomes vacant or deserted "or if this lease be rejected
under (S)235 or Title or the U.S. Code (bankruptcy code);" or if any execution
or attachment shall be issued against Tenant or any of Tenant's property
whereupon the demised premises shall be taken or occupied by someone other than
Tenant: or if Tenant shall make default with respect to any other lease between
Owner and Tenant; or if Tenant shall have failed, after ten days written notice,
to redeposit with Owner any portion or the security deposited hereunder which
Owner has applied, in accordance with the terms of this lease, to the payment or
any rent and additional rent due and payable hereunder then in any one or more
of such events, upon Owner serving a written fifteen (15) days notice upon
Tenant specifying the nature of said default and upon the expiration of said
fifteen (15) days, if Tenant shall have failed to comply with or remedy such
default, or if the said default or omission complained or shall be of a nature
that the same cannot be completely cured or remedied within said fifteen (15)
day period, and if Tenant shall not have diligently commenced curing such
default within such fifteen (15) day period, and shall not thereafter with
reasonable diligence and in good faith, proceed to remedy or cure such default,
then Owner may serve a written ten days' notice of cancellation of this lease
upon Tenant, and upon the expiration or said ten days this lease and the term
thereunder shall end and expire as fully and completely as if the expiration of
such ten day period were the day herein definitely fixed for the end and
expiration of this lease and the term thereof and Tenant shall then quit and
surrender the demised premises to Owner but Tenant shall remain liable as
hereinafter provided.
(2) If the notice provided for in (1) hereof shall have been given;
and the term shall expire as aforesaid; or if Tenant shall make default in the
payment or the rent reserved herein or any item or additional rent herein
mentioned or any part of either or in making any other payment herein required
and such default shall continue for more than five days after the due date
thereof, then and in any or such events Owner may without notice, re-enter the
demised premises either by force or otherwise, and dispossess Tenant by summary
proceedings or otherwise, and the legal representative or Tenant or other
occupant of demised premises and remove their effects and hold the premises as
if this lease had not been made, and Tenant hereby waives the service of notice
of intention to re-enter or to institute legal proceedings to that end. If
Tenant shall make default hereunder prior to the date fixed as the commencement
of any renewal or extension or this lease, Owner may cancel and terminate such
renewal or extension agreement by written notice.
REMEDIES OF OWNER AND WAIVER OF REDEMPTION:
18. In case of any such default, re-entry, expiration and/or dispossess by
summary proceedings or otherwise, (a) the rent, and, additional rent, shall
become due thereupon and be paid up to the time or such re-entry, dispossess
and/or expiration, (b) Owner may re-let the premises or any part or parts
thereof, either in the name of Owner or otherwise., for a term or terms, which
may at Owner's option be less than or exceed the period which would otherwise
have constituted the balance of the term or this lease and may grant concessions
or free rent or charge a higher rental than that in this lease, (c) Tenant or
the legal representatives or Tenant shall also pay Owner as liquidated damages
for the failure of Tenant to observe and perform said Tenant's covenants herein
contained, any deficiency between the rent hereby reserved and or covenanted to
be paid and the net amount, if any, of the rents collected on account or the
subsequent lease or leases or the demised premises rot each month or the period
which would otherwise have constituted the balance or the term or this lease.
The failure or Owner to re-let the premises or any part or parts thereof shall
not release or affect Tenant's liability for damages. In computing such
liquidated damages there shall be added to the said deficiency such expenses as
Owner may incur in connection with re-letting. such as legal expenses,
reasonable attorneys' fees, brokerage, advertising and for keeping the demised
premises in good order or for preparing the same for re-letting. Any such
liquidated damages shall be paid in monthly installments by Tenant on the rent
day specified in this lease and any suit brought to collect the amount of the
deficiency for any month shall not prejudice In any way the rights or Owner to
collect the deficiency for any subsequent month by a similar proceeding. Owner,
in putting the demised premises in good order or preparing the same for re-
rental may, at Owner's option, make such alterations, repairs, replacements,
and/or decorations in the demised premises as Owner, in Owner's sole judgment,
considers advisable and necessary For the purpose of re-letting the demised
premises, and the making of such alterations, repairs, replacements, and/or
decorations shall not operate or be construed to release Tenant from liability
hereunder as aforesaid. Owner shall in no event be liable in any way whatsoever
for failure to re-let the demised premises, or in the event that the demised
premises are re-let, for failure to collect the rent thereof under such re-
letting, and in no event shall Tenant be entitled to receive any excess, if any,
or such net rents collected over the sums payable by Tenant to Owner hereunder.
In the event of a breach or threatened breach by Tenant or any or the covenants
or provisions hereof, Owner shall have the right or injunction and the right to
invoke any remedy allowed at law or in equity as if re-entry, summary
proceedings and other remedies were not herein provided For. Mention in this
lease or any particular remedy, shall not preclude Owner From any other remedy,
in law or in equity. Tenant hereby expressly waives any and all rights of
redemption granted by or under any present or Future laws.
FEES AND EXPENSES:
19. If Tenant shall default in the observance or performance of any term
or covenant on Tenant's part to be observed or performed under or by virtue of
any of the terms or provisions in any article of this lease, after notice if
required and upon expiration of any applicable grace period if any, (except in
an emergency), then, unless otherwise provided elsewhere in this lease, Owner
may immediately or at any time thereafter and without notice perform the
obligation of Tenant thereunder. If Owner, in connection with the Foregoing or
in connection with any default by Tenant in the covenant to pay rent hereunder,
makes any expenditures or incurs any obligations for the payment of money,
including but not limited to reasonable attorney's Fees, in instituting,
prosecuting or defending any action or proceedings, or in connection with any
other disputes with Tenant, and prevails in any such action or proceeding or
dispute, then Tenant will reimburse Owner For such/ sums so paid or reasonable
obligations incurred with interest and costs. The foregoing expenses incurred by
reason or Tenant's default shall be deemed to be additional rent hereunder and
shall be paid by Tenant to Owner within ten (10) days of rendition of any bill
or statement to Tenant therefor. If Tenant's lease term shall have expired at
the time of making of such expenditures or incurring or such obligations, such
sums shall be recoverable by Owner as damages.
BUILDING ALTERATIONS AND MANAGEMENT:
20. Owner shall have the right at any time without the same constituting
an eviction and without incurring liability to Tenant therefor to change the
arrangement and or location of public entrances, passageways, doors, doorways,
corridors, elevators, stairs, toilets or other public parts of the building and
to change the name, number or designation by which the building may be known.
There shall be no allowance to Tenant For diminution of rental value and no
liability on the part or Owner by reason or inconvenience, annoyance or injury
to business arising From Owner or other Tenant making any repairs in the
building or any such alterations, additions and improvements. Furthermore,
Tenant shall not have any claim against Owner by reason or Owner's imposition of
any controls of the manner of access to the building by Tenant's social or
business visitors as the Owner may deem necessary for the security of the
building and its occupants. In connection with this Article, Owner shall use
commercially reasonable efforts, under the existing circumstances, to minimize
unreasonable interference with the conduct of Tenant's business at the demised
premises and use of the demised premises by Tenant; provided, that Owner shall
not be obligated to employ overtime services or incur material expenses in
connection therewith.
* or in connection with any other disputes with Tenants.
**or dispute
Page 3 of 6
<PAGE>
NO REPRESENTATIONS BY OWNER:
21. Neither Owner nor Owner's agents have made any representations or
premises with respect to the physical condition of the building, the land upon
which it is erected or the demised premises, the rents, leases, expenses of
operation or any other matter or thing affecting or related to the demised
premises or the building except as herein expressly set forth and no rights,
easements or licenses are acquired by Tenant by implication or otherwise except
as expressly set forth in the provisions of this lease. Tenant has inspected the
building and the demised premises and is thoroughly acquainted with their
condition and agrees to take the same "as is" on the date possession is
tendered, subject to the terms of this lease, and acknowledges that the taking
of possession ofthe demised premises by Tenant shall be conclusive evidence
that the said premises and the building of which the same form a part were in
good and satisfactory condition at the time such possession was so taken,
except as to latent defects. All understandings and agreements heretofore made
between the parties hereto are merged in this contract, which alone fully and
completely expresses the agreement between Owner and Tenant and any executory
agreement hereafter made shall be ineffective to change, modify, discharge or
effect an abandonment of it in whole or in part, unless such executory agreement
is in writing and signed by the party against whom enforcement of the change,
modification, discharge or abandonment is sought.
END OF TERM:
22. Upon the expiration or other termination of the term of this lease,
Tenant shall quit and surrender to Owner the demised premises, broom clean, in
good order and condition, ordinary wear and damages which Tenant is not required
to repair as provided elsewhere in this lease excepted, and Tenant shall remove
all its property from the demised premises. Tenant's obligation to observe or
perform this covenant shall survive the expiration or other termination of this
lease. If the last day of the term of this Lease or any renewal thereof, falls
on Sunday, this lease shall expire at noon on the preceding Saturday unless it
be a legal holiday in which case it shall expire at noon on the preceding
business day.
QUIET ENJOYMENT:
23. Owner covenants and agrees with Tenant that upon Tenant paying the
rent and additional rent and observing and performing all the terms, covenants
and conditions, on Tenant's part to be observed and performed, Tenant may
peaceably and quietly enjoy the premises hereby demised, subject, nevertheless,
to the terms and conditions of this lease including, but not limited to, Article
34 hereof and to the ground leases, underlying leases and mortgages hereinbefore
mentioned.
FAILURE TO GIVE POSSESSION:
24. If Owner is unable to give possession of the demised premises on the
date of the commencement or the term hereof, because or the holding-over or
retention of possession of any tenant, under Tenant or occupants or if the
demised premises are located in a building being constructed, because such
building has not been sufficiently completed to make the premises ready For
occupancy or because of the fact that a certificate of occupancy has not been
procured or if Owner has not completed any work required to be performed by
Owner, or for any other reason, Owner shall not be subject to any liability for
failure to give possession on said date and the validity of the lease shall not
be impaired under such circumstances, nor shall the same be construed in any way
to extend the term or this lease, but the rent payable hereunder shall be abated
(provided Tenant is not responsible for Owner's inability to obtain possession
or complete any work required) until after Owner shall have given Tenant notice
that Owner is able to deliver possession in the condition required by this
lease, If permission is given to Tenant to enter into the possession of the
demised premises or to occupy premises other than the demised premises prior to
the date specified as the commencement of the term of this lease, Tenant
covenants and agrees that such possession and/or occupancy shall be deemed to be
under all the terms, covenants, conditions and provisions of this lease, except
the obligation to pay the fixed annual rent set forth in page one of this lease.
The provisions or this article are intended to constitute "an express provision
to the contrary" within the meaning of Section 223-n of the New York Real
Property Law.
NO WAIVER:
25. The failure of 0wner or Tenant to seek redress for violation or, or to
insist upon the strict performance of any covenant or condition of this lease or
of any of the Rules or Regulations, set forth or hereafter adopted by Owner,
shall not prevent a subsequent act which would have originally constituted a
violation from having all the force and effect of an original violation. The
receipt by Owner or payment by Tenant to Owner of rent with knowledge of the
breach of any covenant or this lease shall not be deemed a waiver or such breach
and no provision of this lease shall be deemed to have been waived by either
Owner or Tenant unless such waiver be in writing signed by Owner or Tenant (as
the case may be). No payment by Tenant or receipt by Owner of a lesser amount
than the monthly rent herein stipulated shall be deemed to be other than on
account of the earliest stipulated rent, nor shall any endorsement or statement
of any check or any letter accompanying any check or payment as rent be deemed
an accord and satisfaction, and Owner may accept such check or payment without
prejudice to Owner's right to recover the balance of such rent or pursue any
other remedy in this lease provided. All checks tendered to Owner as and for the
rent or the demised premises shall be deemed payments for the account of Tenant.
Acceptance by Owner of rent From anyone other than Tenant shall not be deemed to
operate as an attornment to Owner by the payor of such rent or as a consent by
Owner to an assignment or subletting by Tenant of the demised premises to such
payor, or as a modification or the provisions of this lease. No act or thing .
done by Owner or Owner's agents during the term hereby demised shall be deemed
an acceptance of a surrender or said premises and no agreement to accept such
surrender shall be valid unless in writing signed by Owner. No employee of Owner
or Owner's agent shall have any power to accept the keys of said premises prior
to the termination or the lease and the delivery of keys to any such agent or
employee shall not operate as a termination or the lease or a surrender of the
premises.
WAIVER OF TRIAL BY JURY:
26. It is mutually agreed by and between Owner and Tenant that the
respective parties hereto shall and they hereby do waive trial by jury in any
action, proceeding or counterclaim brought by either of the parties hereto
against the other (except for personal Injury or property damage) on any matters
whatsoever arising out of or in any way connected with this lease, the
relationship of Owner and Tenant, Tenant's use of or occupancy of said premises,
and any emergency statutory or any other statutory remedy. It is further
mutually agreed that in the event Owner commences any proceeding or action for
possession including a summary proceeding for possession or the premises, Tenant
will not interpose any counterclaim of whatever nature or description in any
such proceeding including a counterclaim under Article 4 except for statutory
mandatory counterclaims.
INABILITY TO PERFORM:
27. This lease and the obligation of Tenant to pay rent hereunder and
perform all of the other covenants and agreements hereunder on part of Tenant to
be performed shall in no way be affected, Impaired or excused because Owner is
unable to fulfill any of its obligations under this lease or to supply or is
delayed in supplying any service expressly or impliedly to be supplied or Is
unable to make, or is delayed In making any repair, additions, alterations or
decorations or is unable to supply or is delayed in supplying any equipment,
fixtures or other materials if Owner is prevented or delayed from doing so by
reason or strike or labor troubles or any cause whatsoever beyond Owner's
reasonable control including, but not limited to, governmental preemption or
restrictions or by reason or any rule, order or regulation or any department or
subdivision thereof of any government agency or by reason of the conditions
which have been or are affected, either directly or indirectly, by war or other
emergency.
BILLS AND NOTICES:
28. Except as otherwise in this lease provided, a bill statement, notice
or communication which Owner may desire or be required to give to Tenant, shall
be deemed sufficiently given or rendered if, in writing, delivered to Tenant
personally or sent by registered or certified mail addressed to Tenant at the
building or which the demised premises form a part or at the last known
residence address or business address of Tenant or left at any or the aforesaid
premises addressed to Tenant, and the time of the rendition of such bill or
statement and of the giving of such notice or communication shall be deemed to
be the time when the same is delivered to Tenant, mailed, or left at the
premises as herein provided. Any notice by Tenant to Owner must be served by
registered or certified mail addressed to Owner at the address first hereinabove
given or at such other address as Owner shall designate by written notice.
WATER CHARGES:
29. Tenant requires, uses or consumes water for any purpose in addition to
ordinary lavatory purposes (of which fact Tenant constitutes Owner to be the
sole Judge) Owner may install a water meter and thereby measure Tenant's water
consumption for all purposes. Tenant shall pay Owner for the cost of the meter
and the cost of the installation, thereof and throughout the duration or
Tenant's occupancy Tenant shall keep said meter and installation equipment in
good working order and repair at Tenant's own cost and expense in default of
which Owner may cause such meter and equipment to be replaced or repaired and
collect the cost thereof from Tenant, as additional rent. Tenant agrees to pay
for water consumed, as shown on said meter as and when bills are rendered, and
on default in making such payment Owner may pay such charges and collect the
same from Tenant, as additional rent. Tenant covenants and agrees to pay, as
additional rent, the sewer rent, or any other tax, rent, levy or charge which
now or hereafter is assessed, imposed or a lien upon the demised premises or the
realty of which they are part pursuant to law, order or regulation made or
issued in connection with the use, consumption, maintenance or supply of water,
water system or sewage or sewage connection or system. Independently of and in
addition to any of the remedies reserved to Owner hereinabove or elsewhere in
this lease, Owner may sue for and collect any monies to be paid by Tenant or
paid by Owner for any of the reasons or purposes hereinabove set forth.
SPRINKLERS:
30. Anything elsewhere in this lease to the contrary notwithstanding, if
the New York Board of Fire Underwriters or the New York Fire Insurance Exchange
or any bureau, department or official of the federal, state or city government
recommend or require the installation of a sprinkler system or that any changes,
modifications, alterations, or additional sprinkler heads or other equipment be
made or supplied in an existing sprinkler system by reason or Tenant's business,
or the location of partitions, trade fixtures, or other contents of the demised
premises, or for any other reason due to Tenant's use of the demised premises or
if any such sprinkler system installations, modifications, alterations,
additional sprinkler heads or other such equipment, become necessary in the
demised premises to prevent the imposition or a of a penalty or charge against
the full allowance for a sprinkler system in the fire insurance rate set by any
said Exchange or by any fire insurance company, Tenant shall, at Tenant's
expense, promptly make such sprinkler system installations, changes,
modifications, alterations, and supply additional sprinkler heads or other
equipment as required whether the work involved shall be structural or non-
structural in nature.
ELEVATORS, HEAT, CLEANING:
31. As long as Tenant is not in default under any the covenants or this
lease beyond the applicable grace period provided in this lease for the curing
of such defaults, Owner shall: (a) provide necessary passenger elevator
facilities on business days from 8 a.m. to 6 p.m. and on Saturdays from 8 a.m.
to 1 p.m. and have one elevator subject to call at all other times (b) provide
freight elevator service only on regular business days Monday through Friday
inclusive, and on those days only between the hours of 9 a.m. and 12 noon and
between 1 p.m. and 5 p.m.; (c) furnish heat, cold water and other services
supplied by Owner to the demised premises, when and as required by law, on
business days from 8 a.m. to 6 p.m. and on Saturdays from 8 a.m. to 1 p.m.
Page 4 of 6
<PAGE>
(d) clean the public halls and public portions of the building which are used in
common by all tenants. Tenant shall, at Tenant's expense, keep the demised
premises, including the inside of the windows clean and in order, to the
reasonable satisfaction of Owner, and for that purpose shall employ the person
or persons, or corporation reasonably approved by Owner. Tenant shall at
Tenant's expense remove Tenant's refuse and rubbish from the building. Tenant
shall, independently contract for the removal of such rubbish and refuse. The
removal of such refuse and rubbish by others shall be subject to such rules and
regulations as, in the judgment of Owner, are necessary for the proper operation
of the building. Owner reserves the right to stop service of the heating,
elevator, plumbing and electric systems, when necessary, by reason of accident,
or emergency, or for repairs, alterations, replacements or improvements, in the
judgment of Owner desirable or necessary to be made, until said repair,
alterations, replacements or improvements shall have been completed; provided,
that in connection with the exercise of Owner's rights specified in this
sentence, Owner shall use commercially reasonable efforts, under the existing
circumstances, to minimize unreasonable interference with the conduct of
Tenant's business at the demised premises and use of the demised premises by
Tenant; provided, further, that Owner shall not be obligated to employ overtime
services or incur my material expenses in connection therewith. If the building
of which the demised premises are a part supplies manually operated elevator
service, Owner may proceed diligently with alterations necessary to substitute
automatic control elevator service without in any way affecting the obligations
of Tenant hereunder. Subject to the provision of this lease, Tenant shall have
access to the building and the demised premises, 24 hours per day, seven days
per week.
SECURITY:
32. Tenant has deposited with Owner the sum of $250,000 and shall deposit
an additional $250,000 upon the substantial completion of Owner's Work (as
hereinafter defined) on the 4th floor of the building, as security for the
faithful performance and observance by Tenant of the terms, provisions and
conditions of this lease; it is agreed that in the event Tenant defaults in
respect of any of the terms, provisions and conditions of this lease, including,
but not limited to, the payment of rent and additional rent, Owner may use.,
apply or retain the whole or any part of the security so deposited to the extent
required for the payment of any rent and additional rent or any other sum as to
which Tenant is in default or for any sum which Owner may expend or may be
required to expend by reason of Tenant's default in respect of any of the terms,
covenants and conditions of this lease, including but not limited to, any
damages or deficiency in the reletting of the premises, whether such damages or
deficiency accrued before or after summary proceedings or other re-entry by
Owner. In the event that Tenant shall fully and faithfully comply with all of
the terms, provisions, covenants and conditions of this lease, the security
shall be returned to Tenant after the date fixed as the end of the Lease and
after delivery of entire possession of the demised premises to Owner. In the
event of a sale of the land and building or leasing of the building, of which
the demised premises form a part, Owner shall have the right to transfer the
security to the vendee or lessee and Owner shall thereupon be released by Tenant
from all liability for the return of such security; and Tenant agrees to look to
the new Owner solely for the return of said security, and it is agreed that the
provisions hereof shall apply to every transfer or assignment made of the
security to a new Owner. Tenant further covenants that it will not assign or
encumber or attempt to assign or encumber the monies deposited, herein as
security and that neither Owner nor its successors or assigns shall be bound by
any such assignment, encumbrance, attempted assignment or attempted encumbrance.
CAPTIONS:
33. The Captions are inserted only as a matter of convenience and for
reference and in no way define, limit or describe the scope of this lease nor
the intent of any provision thereof.
DEFINITIONS:
34. The term "Owner" as used in this lease means only the owner of the fee
or of the leasehold of the building, or the mortgagee in possession, for the
time being of the land and building (or the owner of a lease of the building or
of the land and building) or which the demised premises form a part, so that in
the event of any sale or sales of said land and building or of said lease, or in
the event of a lease of said building, or of the land and building, the said
Owner shall be and hereby is entirely freed and relieved of all covenants and
obligations of owner hereunder (except those that have accrued prior to the date
of conveyance), and it shall be deemed and construed without further agreement
between the parties or their successors in interest, or between the parties and
the purchaser, at any such sale, or the said lessee of the building, or of the
land and building, that the purchaser or the lessee of the building has assumed
and agreed to carry out any and all covenants and obligations of Owner
hereunder. The words "re-enter" and "re-entry" as used in this lease are not
restricted to their technical legal meaning. The term "rent" includes the annual
rental rate whether so expressed or expressed in monthly installments, and
"additional rent." "Additional rent" means all sums which shall be due to Owner
from Tenant under this lease, in addition to the annual rental rate. The term
"business days" as used in this lease, shall exclude Saturdays, Sundays and all
days observed by the State or Federal Government as legal holidays and those
designated as holidays by the applicable building service union employees
service contract or by the applicable Operating Engineers contract with respect
to HVAC service. Wherever it is expressly provided in this lease that consent
shall not be unreasonably withheld, such consent shall not be unreasonably
delayed.
ADJACENT EXCAVATION-SHORING:
35. If an excavation shall be made upon land adjacent to the demised
premises, or shall be authorized to be made. Tenant shall afford to the person
causing or authorized to cause such excavation, license to enter upon the
demised premises for the purpose of doing such work as said person shall deem
necessary to preserve the wall or the building of which demised premises form a
part from injury or damage and to support the same by proper foundations without
any claim for damages or indemnity against Owner, or diminution or abatement of
rent.
RULES AND REGULATIONS:
36. Tenant and Tenant's servants, employees, agents, visitors, and
licensees shall observe faith fully, and comply strictly with, the Rules and
Regulations annexed hereto and such other and further reasonable Rules and
Regulations as Owner or Owner's agents may from time to time adopt upon notice
to Tenant. Notice of any additional rules or regulations shall be given in such
manner as Owner may elect. In case Tenant disputes the reasonableness of any
additional Rule or Regulation hereafter made or adopted by Owner or Owner's
agents, the parties hereto agree to submit the question of the reasonableness of
such Rule or Regulation for decision to the New York office of the American
Arbitration Association, whose determination shall be final and conclusive upon
the parties hereto. The right to dispute the reasonableness of any additional
Rule or Regulation upon Tenant's part shall be deemed waived unless the same
shall be asserted by service of a notice, in writing upon Owner within fifteen
(15) days after the giving of notice thereof. Nothing in this lease contained
shall be construed to impose upon Owner any duty or obligation to enforce the
Rules and Regulations or terms, covenants or conditions in any other lease, as
against any other tenant and Owner shall not be liable to Tenant for violation
of the same by any other tenant, its servants, employees, agents, visitors or
licensees. Notwithstanding the foregoing, all Rules and Regulations shall be
enforced in a nondiscriminatory fashion among all tenants in the building. The
lease provisions shall control and supersede any contradictory on inconsistent
provisions contained in the Rules and Regulations.
GLASS:
37. Owner shall replace, at the expense of the Tenant, any and all plate
and other glass damaged or broken from any cause whatsoever in and about the
demised premises. Owner may insure, and keep insured, at Tenant's expense, all
plate and other glass in the demised premises for and in the name of Owner.
Bills for the premiums therefor shall be rendered by Owner to Tenant at such
times as Owner may elect, and shall be due from, and payable by, Tenant when
rendered, and the amount thereof shall be deemed to be, and be paid, as
additional rent.
ESTOPPEL CERTIFICATE:
38. Tenant, at any time and from time, to time, upon at least 15 days
prior notice by Owner, shall execute, acknowledge and deliver to Owner, and/or
to any other person, firm or corporation specified by Owner, a statement
certifying that this Lease is unmodified in full force and effect (or, if there
have been modifications, that the same is in full force and effect as modified
and stating the modifications), stating the dates to which the rent and
additional rent have been paid, and stating whether or not there exists any
default by Owner under this Lease, and, if so, specifying each such default.
DIRECTORY BOARD LISTING:
39. If, at the request of and as accommodation to Tenant, Owner shall
place upon the directory board in the lobby of the building, one or more names
of persons other than Tenant, such directory board listing shall not be
construed as the consent by Owner to an assignment or subletting by Tenant to
such person or persons.
SUCCESSORS AND ASSIGNS:
40. The covenants, conditions and agreements contained in this lease shall
bind and Inure to the benefit of Owner and Tenant and their respective heirs,
distributees, executors, administrators, successors, and except as otherwise
provided in this lease, their assigns.
The Rider attached to this lease is hereby made as part of this lease and
contains Article 41 through 75.
IN WITNESS WHEREOF, Owner and Tenant have respectively signed and sealed this
lease as of the day and year first above written.
Witness for Owner: Lautob Realty Company [SEAL]
------------------------------------------
By: /s/ [SIGNATURE ILLEGIBLE]^^ [L.S]
---------------------------- ------------------------------------------
Witness for Tenant: Scient Corporation [SEAL]
------------------------------------------
By: /s/ William H. Kurtz, [L.S]
---------------------------- ------------------------------------------
William H. Kurtz, Executive Vice President
______________
*at Tenant's expense
*and shall deposit an additonal $250,000 upon the substantial completion of
Owner's Work (as hereinafter defined) on the 4th Floor of the building.
Page 5 of 6
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ACKNOWLEDGEMENTS
CORPORATE TENANT
STATE OF NEW YORK, SS.:
COUNTY OF
On this day of ,19 , before me personally came
to me known, who being by me duly sworn, did depose and say that he resides in
that he is the of the corporation described in and which executed
the foregoing instrument, as TENANT; that he knows the seal of said corporation;
that the seal affixed to said instrument is such corporate seal; that it was so
affixed by order of the Board of Directors of said corporation, and that
he signed his name thereto by like order.
INDIVLDUAL TENANT
STATE OF NEW YORK, SS.:
COUNTY OF
On this day of ,19 , before me personally came
to be known and known to me to be the individual described in and who, as
TENANT, executed the foregoing instrument and acknowledged to me that he
executed the same.
IMPORTANT - PLEASE READ
RULES AND REGULATIONS ATTACHED TO AND
MADE A PART OF THIS LEASE IN
ACCORDANCE WITH ARTICLE 36.
1. The sidewalks, entrances, driveways, passages, courts, elevators,
vestibules, stairways, corridors or halls shall not be obstructed or encumbered
by any Tenant or used for any purpose other than for ingress or egress from the
demised premises and for delivery of merchandise and equipment in a prompt and
efficient manner using elevators and passageways designated for such delivery by
Owner. There shall not be used in any space, or in the public hall of the
building, either by any Tenant or by jobbers or others in the delivery or
receipt of merchandise, any hand trucks, except those equipped with rubber tires
and sideguards. If said premises are situated on the ground floor of the
building, Tenant thereof shall further, at Tenant's expense, keep the sidewalk
and curb in front of said premises clean and free from ice, snow, dirt and
rubbish.
2. The water and wash closets and plumbing fixtures shall not be used for
any purposes other than those for which they were designed or constructed and no
sweepings, rubbish, rags, acids or other substances shall be deposited therein,
and the expense of any breakage, stoppage, or damage, resulting from the
violation of this rule shall be borne by the Tenant who, or whose clerks,
agents, employees or visitors, shall have caused it.
3. No carpet, rug or other article shall be hung or shaken out of any
window of the building; and no Tenant shall sweep or throw or permit to be swept
or thrown from the demised premises any dirt or other substances into any of the
corridors of halls, elevators, or out of the doors or windows or stairways of
the building and Tenant shall not use, keep or permit to be used or kept any
foul or noxious gas or substance in the demised premises, or permit or suffer
the demised premises to be occupied or used in a manner offensive or
objectionable to Owner or other occupants of the buildings by reason of noise,
odors, and or vibrations, or interfere in any way, with other Tenants or those
having business therein, nor shall any bicycles, vehicles, animals, fish, or
birds be kept in or about the building. Smoking or carrying lighted cigars or
cigarettes in the elevators of the building is prohibited.
4. No awnings or other projections shall be attached to the outside walls
of the building without the prior written consent of Owner.
5. No sign, advertisement, notice or other lettering shall be exhibited,
inscribed, painted or affixed by any Tenant on any part of the outside of the
demised premises or the building or on the inside of the demised premises if the
same is visible from the outside of the premises without the prior written
consent of Owner, except that the name of Tenant may appear on the entrance door
of the premises. In the event of the violation of the foregoing by any Tenant,
Owner may remove same without any liability and may charge the expense incurred
by such removal to Tenant or Tenants violating this rule. Interior signs on
doors and directory tablet shall be inscribed, painted or affixed for each
Tenant by Owner at the expense of such Tenant, and shall be of a size, color and
style acceptable to Owner.
6. No Tenant shall mark, paint, drill into, or in any way deface any part
of the demised premises or the building of which they form a part. No boring,
cutting or stringing of wires shall be permitted, except with the prior written
consent of Owner, and as Owner may direct. No Tenant shall lay linoleum, or
other similar floor covering, so that the same shall come in direct contact with
the floor of the demised premises, and, if linoleum or other similar floor
covering is desired to be used an Interlining of builder's deadening felt shall
be first affixed to the floor, by a paste or other material, soluble in water,
the use of cement or other similar adhesive material being expressly prohibited.
7. No additional locks or bolts of any kind shall be placed upon any of
the doors or windows by any Tenant, nor shall any changes be made in existing
1ocks or mechanism thereof. Each Tenant must, upon the termination of his
Tenancy, restore to Owner all keys of stores, offices and toilet rooms, either
furnished to, or otherwise procured by, such Tenant, and in the event of the
loss of any keys, so furnished, such Tenant shall pay to Owner the cost thereof.
8. Freight, furniture, business equipment, merchandise and bulky matter of
any description shall be delivered to and removed from the premises only on the
freight elevators and through the service entrances and corridors, and only
during hours and in a manner approved by Owner. Owner reserves the right to
inspect all freight to be brought into the building and to exclude from the
building all freight which violates any of these Rules and Regulations of the
lease of which these Rules and Regulations are a part.
9. No Tenant shall obtain for use upon the demised premises ice, drinking
water, towel and other similar services, or accept barbering or bootblacking
services in the demised premises, except from persons authorized by Owner, and
at hours and under regulations fixed by Owner. Canvassing, soliciting and
peddling in the building is prohibited and each Tenant shall cooperate to
prevent the same.
10. Owner reserves the right to exclude from the building all persons who
do not present a pass to the building signed by Owner. Owner will furnish passes
to persons for whom any Tenant requests same in writing. Each Tenant shall be
responsible for all persons for whom he requests such pass and shall be liable
to Owner for all acts of such persons. Notwithstanding the foregoing, Owner
shall not be required to allow Tenant or any person to enter or remain in the
building, except on business days from 8:00 a.m. to 6:00 p.m. and on Saturdays
from 8:00 a.m. to 1:00 p.m. Tenant shall not have a claim against Owner by
reason of Owner excluding from the building any person who does not present such
pass.
11. Owner shall have the right to prohibit any advertising by any Tenant
which in Owner's opinion, tends to impair the reputation of the building or its
desirability as a loft building, and upon written notice from Owner, Tenant
shall refrain from or discontinue such advertising.
12. Tenant shall not bring or permit to be brought or kept in or on the
demised premises, any inflammable, combustible, or explosive, or hazardous
fluid, material, chemical or substance, or cause or permit any odors of cooking
or other processes, or any unusual or other objectionable odors to permeate in
or emanate from the demised premises.
13. Tenant shall not use the demised premises in a manner which disturbs or
interferes with other Tenants in the beneficial use of their premises.
Address 860 Broadway
New York, New York
Premises 3rd and 4th Floors
================================================================================
Lautob Realty Company
TO
Scient Corporation
================================================================================
STANDARD FORM OF
LOFT
[LOGO] LEASE [LOGO]
The Real Estate Board of New York, Inc.
(C) Copyright 1994. All rights Reserved.
Reproduction in whole or in part prohibited.
================================================================================
Dated October 28, 1998
Rent Per Year See lease
Rent Per Month See lease
Term
From See lease
To
Drawn by.........................
Checked by.......................
Entered by........................
Approved by......................
================================================================================
Page 6 of 6
<PAGE>
Index To Rider To Agreement of
Lease Dated As of October 28, 1998,
Between Lautob Realty Company,
Owner, and Scient Corporation, Tenant
Article And Title Page
----------------- ----
41. Conflicts...................................................... 1
42. Term; Fixed Rent; As Is; Owner's Work; Construction Allowance.. 1
43. Real Estate Taxes.............................................. 3
44. Electric Energy................................................ 4
45. Additional Rent; Default Notices............................... 6
46. Survival....................................................... 6
47. Certain Restrictions........................................... 6
48. Insurance...................................................... 7
49. Sale of Stock, Partnership Interests or Other Interests........ 7
50. Security Deposit............................................... 7
51. Arrears........................................................ 8
52. Broker......................................................... 8
53. No Owner Liability............................................. 8
54. Interpretation................................................. 8
55. Owner's Consent; Arbitration................................... 8
56. Interest....................................................... 9
57. Execution of Lease............................................. 9
58. Managing Agent................................................. 9
59. Security Interests............................................. 9
60. Air-Conditioning............................................... 9
61. Rent Control................................................... 9
62. Holding Over................................................... 9
63. Tenant's Work.................................................. 9
64. Americans With Disabilities Act (the "ADA");
Local Law No. 5 of 1973, as amended (the "Law")............ 11
65. Confidentiality................................................ 11
66. Assignment and Subletting...................................... 11
67. Letter of Credit for Security Deposit.......................... 14
68. Nondisturbance Agreement....................................... 14
69. Access......................................................... 15
70. Signs.......................................................... 15
71. Zoning......................................................... 15
72. No Residential Use............................................. 15
73. Locks.......................................................... 15
74. Financing...................................................... 15
75. Right of First Offer........................................... 15
<PAGE>
Rider To Agreement of Lease Dated as of October 28, 1998,
Between Lautob Realty Company, Owner,
and Scient Corporation. Tenant
---------------------------------------------------------
41. Conflicts. In the event of any conflict between any of the
---------
provisions of this Rider and any of: the provisions, printed or typewritten, of
the printed portion of this lease, the provisions of this Rider shall control.
42. Term: Fixed Rent; As Is: Owner's Work: Construction Allowance.
-------------------------------------------------------------
(a) The term of this lease (unless it shall sooner expire or terminate) shall
commence on the date of this lease and shall end on the last day of the month in
which occurs the 10th anniversary of the 4th Floor Rent Commencement Date (as
defined below).
(b) The annual fixed rent under this lease (subject to increase
as provided in this lease) shall be (i) $350,000 per annum for the 3rd floor of
the demised premises from the date of this lease through the last day of the
month in which occurs the 1st anniversary of the date of this lease and (ii)
$350,000 per annum for the 4th floor of the demised premises from the date of
this lease through the last day of the month in which occurs the 1st anniversary
of the date of substantial completion of Owner's Work (as defined below)
(subject to the provisions of clause (c) of this Article). Commencing the first
day of the month (the "First Escalation Date") immediately following the month
in which occurs the 1st anniversary of the date of this lease, and on each
anniversary of the First Escalation Date thereafter, the annual fixed rent for
the 3rd floor of the demised premises shall Increase by an amount equal to 3
percent of the annual fixed rent for such space in effect for the immediately
preceding 12-month period (which increase shall be added to the fixed rent for
the 3rd floor of the demised premises in effect for the immediately preceding
12-month period to form the fixed rent for such space for the next 12 months,
until the next increase). Commencing on the first date of the month (the "Second
Escalation Date") immediately following the month in which occurs the 1st
anniversary of the date of substantial completion of Owner's Work, and on each
anniversary of the Second Escalation Date thereafter, the annual fixed rant for
the 4th floor of the demised premises shall Increase by an amount equal to 3
percent of the annual fixed rent for such space in effect for the immediately
preceding 12-month period (which increase shall be added to the fixed rent for
the 4th floor of the demised premises in effect for the immediately preceding
12-month period to form the fixed rent for such space for the next 12 months,
until the next increase). In addition to all other payments of fixed rent and
additional rent, and all other increases expressly set forth under this lease,
the annual fixed rent shall be Increased by $25,000 on October 1, 2003. The
fixed rent under this lease shall be appropriately prorated if the period for
which the same is payable is not a full calendar month.
(c) Notwithstanding any provision of this lease to the contrary,
provided Tenant is not in default under this lease following any required notice
and the expiration of any applicable cure period, the annual fixed rent for the
3rd floor (in the amount of $350,000 per annum) shall commence 90 days following
the date of this lease and the fixed rent for the 4th floor (in the amount of
$350,000 per annum) shall abate and not commence until the date (the "4th Floor
Rent Commencement Date") which is the later of (i) August 1, 1999 or 90 days
following the date of the substantial completion of Owner's Work. The period of
free or reduced fixed rent set forth in this Article is provided to Tenant in
consideration of Tenant's compliance with the provisions of this lease. If,
therefore, Tenant shall at any time be in default under this lease following any
required notice and the expiration of any applicable grace period, Tenant shall
pay to Owner, within 10 days following Owner's demand (which demand shall
specify such default), the full amount of the fixed rent which would have been
paid by Tenant to Owner during the period of free or reduced fixed rent had
Tenant been required to commence the payment of the full fixed rent on the date
the term of this lease commenced,
(d) Notwithstanding any provision of this lease to the contrary,
Tenant shall accept possession of the demised premises "AS IS" on the date the
term of this lease shall commence (except that Owner shall deliver the 3rd floor
to Tenant in a broom swept condition) and Owner shall have no obligation to
furnish, render or supply any work, labor, services, equipment, materials,
decorations, furniture or fixtures to make the demised premises ready or
suitable for Tenant's use or occupancy, except that Owner shall, at its expense,
in a building standard manner, using building standard materials, as soon as
practicable following the date the current occupant of the 4th floor vacates the
entire 4th floor, perform the following work with respect to the 4th floor
("Owner's Work"): (i) furnish and Install new air conditioning unit(s)
substantially similar to the unit(s) on the 3rd floor (but the distribution
system within the 4th floor shall be furnished and installed by Tenant at
Tenant's expense, subject to and in accordance with this lease); (ii) construct
one men's and one women's bathroom complying with the ADA (as defined below)
substantially similar to the bathrooms on the 3rd floor; (iii) sand and refinish
the hardwood floors on the 4th floor; (iv) paint all walls and other painted
surfaces of the 4th floor remaining after demolition by Owner and (v) render the
4th floor In a broom swept condition. Upon the substantial completion of Owner's
Work, Owner Shall assign to Tenant all assignable warranties of Owner with
respect to the new air conditioning units installed on the 4th floor by Owner.
(e) If the substantial completion of Owner's Work shall be
delayed due to any act or omission of Tenant or any of its employees, agents or
contractors (i) Owner's Work shall be deemed substantially complete on the date
Owner's Work would have been substantially complete but for such act or
<PAGE>
omission and (ii) Tenant shall reimburse Owner for any and all expenses, losses,
costs, and damages suffered by Owner as the result of such delay. If the date of
the substantial completion of Owner's Work shall not occur, through no fault of
Tenant or any of Tenant's employees, agents or contractors, on or prior to
January 1, 2000, then Tenant may, by notice to Owner given on or prior to
February 1, 2000 (time being of the essence), elect to terminate this lease (1)
as to the entire demised premises or (2) as to the 4th floor of the demised
premises. This lease shall so terminate 30 days after such notice as if that
date was the expiration date specified in this lease with respect to the
affected space; provided, that if the date of the substantial completion of
Owner's Work occurs before such termination date, then this lease shall continue
in full force and effect. If Tenant shall have elected to exercise the option
specified in clause (2) above, after such termination, the demised premises
shall exclude the 4th floor of the demised premises and fixed rent and
additional rent under this lease shall be appropriately adjusted.
(f) Each portion of the demised premises shall be conclusively
presumed to be in satisfactory condition on the date Tenant takes possession of
such portion except for latent defects and except for other defects of which
Tenant gives Owner notice within 30 days after such possession specifying with
reasonable particularity the respects in which the demised premises were not in
satisfactory condition on such commencement date.
(g) Owner's Work shall be deemed substantially completed at such
time as the 4th floor can be used by Tenant for Tenant's business
notwithstanding the fact that (i) any work to be done by Tenant is not completed
(including, without limitation, the installation of telephones), (ii) decorating
and touching-up of painting are not completed and (iii) minor or insubstantial
details of construction or mechanical adjustment remain to be performed. Owner
shall diligently prosecute to completion any of the foregoing which constitutes
Owner's Work. Owner shall give Tenant not less than 5 business days' prior
notice of the date which Owner reasonably believes is the date of the
substantial completion of Owner's Work. Tenant may dispute the date of
substantial completion of Owner's Work in a notice to Owner given within 5
business days after the foregoing notice from Owner (time being of the essence).
Tenant's notice shall reasonably describe the mason that Tenant disputes such
date. For a period of 15 days following such Tenant's notice, Owner and Tenant
shall, in good faith, attempt to mutually resolve such dispute. If the same is
not so mutually resolved within such 15-day period (time being of the essence),
either Owner or Tenant may submit the dispute to arbitration under Article 55 of
this lease. Pending the resolution of the dispute under this Article, the date
which Owner specifies as the date of substantial completion of Owner's Work
shall control. When the dispute is resolved under this Article, equitable
adjustments shall be made under this lease and (1) overpayments, if any, made by
Tenant to Owner of fixed rent and additional rent shall be applied by Owner to
the next installments of fixed rent and additional rent due under this lease and
(2) underpayments, if any, of fixed rent and additional rent shall be paid by
Tenant to Owner within 5 days after notice from Owner.
(h) Upon the occurrence of the 4th Floor Rent Commencement Date,
Owner and Tenant shall confirm in a writing satisfactory to Owner the 4th Floor
Rent Commencement Date and the expiration date of the term (but any delay in
confirming, or failure to confirm, same shall not delay those dates).
(i) Provided Tenant is not then in default under this lease
following any required notice and the expiration of any applicable cure period,
Owner shall provide a construction allowance (the "Construction Allowance") of
up to $250,000 with respect to the 3rd floor and up to $250,000 with respect to
the 4th floor for all costs incurred by Tenant for any permanent leasehold
improvements to the floor of the demised premises In question (the "Reimbursable
Costs") (which shall exclude, without limitation, the cost of architects,
designers; engineers, attorneys, accountants, permits, moving, telephone and
computer equipment, Tenant's trade fixtures, and Tenant's furniture and other
personal property); provided, that such leasehold improvements are performed in
accordance with this lease with respect to Tenant's initial preparation of the
applicable floor for Tenant's initial occupancy thereof (such leasehold
improvements being called "Initial Improvements"). The Construction Allowance
shall be advanced to pay for the Reimbursable Costs upon the conditions
specified below, and as the construction progresses.
(i) Not fewer than 10 days before the date of such advance,
Owner shall have received a certificate of Tenant and its general
contractor stating (1) the amount of such advance being requested and
whether that advance is for the 3rd floor or the 4th floor of the demised
premises, (2) the Period (as hereinafter defined) covered by such
certificate, (3) the Reimbursable Costs for the Initial Improvements
Incurred during the applicable Period insofar as actually incorporated into
the demised premises, (4) that the amount of such advance either has been
paid by Tenant or is justly due to such general contractor for the labor
and materials described in such certificate supplied during the applicable
Period in connection with the Initial Improvements insofar as actually
incorporated therein, (5) that no portion of the Reimbursable Costs
described in any previous or then pending requisition by Tenant has been or
is being made the basis for such advance and (6) that the work theretofore
performed at the demised premises has been done in accordance with this
lease;
(ii) at the time of the delivery of the certificate referred
to in Article 42(i)(i), Tenant shall deliver to Owner (1) final and
unconditional full or partial lien releases (as appropriate) for the
Reimbursable Costs which were the basis for the Immediately preceding
advance
2
<PAGE>
of the Construction Allowance and (2) reasonable evidence of Tenant's
payment of the costs and expenses in connection with the Initial
Improvements accrued to the date of such certificate (except to the extent
such costs and expenses are advanced by Owner under this lease);
(iii) Owner shall not be obligated to advance any portion of
the Construction Allowance if (1) such advance is in connection with any
item not yet incorporated into the demised premises or (2) there exists any
default under this lease by Tenant following any required notice and the
expiration of any applicable cure period;
(iv) each such advance shall be made (1) on a business day
at the office of Owner specified above (or at any other office in New York,
New York specified by Owner), (2) by the issuance of a check by Owner
payable to the order of Tenant and (3) not more frequently than once in
each calendar month;
(v) Subject to Article 42(j), Owner shall not be obligated
to disburse an amount equal to 10% of each advance of the Construction
Allowance (the sum of all amounts not so disbursed by Owner being
collectively called, the "Retainage");
(vi) notwithstanding anything to the contrary contained in
this lease, Owner may (but shall not be obligated to), from time to time
(whether or not Owner shall be obligated to make an advance of the
Construction Allowance), pay directly out of the Construction Allowance any
costs and expenses in connection with the Initial Improvements, and the
amount so paid shall be deemed to be an advance of the Construction
Allowance; provided that Owner shall only pay such amount (1) to
contractors, materialmen and/or suppliers Involved with the Initial
Improvements and (2) to the extent Owner reasonably believes the same is
due to such contractors, materialmen and/or suppliers.
(vii) at the time of the final advance of the Construction
Allowance (excluding the Retainage), Tenant shall deliver to Owner evidence
reasonably acceptable to Owner that Tenant has obtained waivers of all
mechanics' and materialmen's liens in connection with the Initial
Improvements;
(viii) each such advance shall be used solely (1) to pay for
the costs and expenses of unaffiliated third parties in connection with the
Initial Improvements or (2) to reimburse Tenant for amounts paid by Tenant
on account of the same; and
(ix) Owner shall not be obligated to advance under this
lease more than (1) $250,000 with respect to the Initial Improvements for
the 3rd floor of the demised premises and (2) $250,000 with respect to the
Initial Improvements for the 4th floor of the demised premises.
For the purpose of this Article, the term "Period" shall mean,
with respect to any advance of the Construction Allowance, the period
covered by any certificate of Tenant received by Owner pursuant to Article
42(i)(i); provided, that not more than one Period shall be covered by any
such certificate.
(j) The Retainage shall be advanced to Tenant when Owner
determines (in the exercise of its reasonable judgment) that construction
of the Initial Improvements has been fully completed In accordance with
this lease and the relevant contracts and that the contractors and
materialmen are entitled to the same under their respective contracts. At
the time of the advance of the Retainage, Tenant shrill deliver to Owner
final and unconditional lien releases In connection with the Initial
Improvements.
43. Real Estate Taxes. (a) For the purpose of this Article:
------------------
(i) The term "Taxes" shall mean (1) the real estate taxes,
vault charges, assessments and special assessments imposed on the building
and/or the land on which the building is erected (excluding business improvement
district charges); provided, that if any real estate taxes, vault charges,
assessments or special assessments are challenged by Owner, an appropriate
adjustment shall be made to the amount of Taxes when the same is finally
determined and (2) any expenses Incurred by Owner in contesting the same. If at
any time during the term of this lease the methods of taxation prevailing on the
date hereof shall be altered so that in lieu of, or as an addition to, or as a
substitute for, the whole or any part of such real estate taxes, vault charges,
assessments and special assessments now Imposed on real estate, there shall be
levied, assessed and imposed (x) a tax, assessment, levy, imposition, license
fee or charge wholly or partially as a capital levy or otherwise on the rents
received therefrom, or (y) any other additional or substitute tax, assessment,
levy, imposition, fee or charge, then all such taxes, assessments, levies,
impositions, fees or charges shall be deemed to be included within the term
"Taxes" for the purposes hereof.
(ii) The term "Base Tax Year" shall mean the Tax Year
ending June 30, 1999 with respect to the 3rd floor and June 30, 2000 with
respect to the 4th floor.
(iii) The term "Base Tax" shall mean the Taxes for the Base
Tax Year.
3
<PAGE>
(iv) The term "BID Charges" shall mean business Improvement
district charges imposed on the building and/or the land on which the building
Is erected, and any expenses incurred by Owner in contesting the same.
(v) The term "Tax Year" shall mean each successive New
York City real estate fiscal year, commencing on July 1st and expiring on the
next occurring June 30th. If the present use of July 1st through June 30th as
the New York City real estate fiscal year shall change, then such changed fiscal
year shall be the Tax Year under this lease.
(vi) The term "Tenant's Share" shall mean 16.67 percent
with respect to the 3rd floor and 16.67 percent with respect to the 4th floor.
(b) (i) If the Taxes for any Tax Year shall exceed the Base
Tax, Tenant shall pay for such Tax Year an amount ("Tax Payment") equal to
Tenant's Share of such excess, and (ii) Tenant shall pay for each Tax Year an
amount ("BID Payment") equal to Tenant's Share of the BID Charges for that Tax
Year. If a Tax Year ends after the expiration or termination of the term of this
lease, the Tax Payment and BID Charges therefor shall be prorated to correspond
to that portion of such Tax Year occurring within the term of this lease. If the
real estate fiscal tax year of the City of New York shall be changed during the
term of this lease, any Taxes or BID Charges for a real estate fiscal tax Year,
a part of which is included within a particular Tax Year and a part of which is
not so included, shall be apportioned on the basis of the number of days in the
real estate fiscal tax year included in the particular Tax Year for the purpose
of making the computations under this Article.
(c) The Tax Payment and BID Payment shall be payable by Tenant
within 30 days after receipt of a demand from Owner (which demand shall not be
given more that 60 days prior to the date payment of the same is due by Owner),
which demand shall be accompanied by (i) Owner's computation of the Tax Payment
and BID Payment and (ii) a copy of the relevant tax bills and bills for the Bid
Charges. Notwithstanding the foregoing, at Owner's option, to be exercised at
any time during the term of this lease upon notice to Tenant, Tenant shall pay
on the first day of each month, on account of the Tax Payment or the BID Payment
for the next Tax Year, an amount equal to one-twelfth of the Tax Payment or the
BID Payment for the preceding Tax Year. If the aggregate payments on account of
the Tax Payment or the BID Payment in any Tax Year shall exceed the Tax Payment
or the BID Payment actually payable for that Tax Year, the excess shall, at
Owner's option, either be credited against subsequent payments payable by
Tenant, if any, under this Article or promptly refunded to Tenant; and if the
Tax Payment or the BID Payment for any Tax Year actually payable shall exceed
the aggregate payments on account of the Tax Payment or the BID Payment, the
excess shall be promptly paid by Tenant within 10 days after receipt of a demand
from Owner, which demand shall be accompanied by Owner's computation of the
amount due and set forth the Tax Payment and the BID Payment actually payable
for that Tax Year and the amounts paid by Tenant on account of the same for that
Tax Year.
(d) If the Base Tax is reduced as a result of an appropriate
proceeding or otherwise, Owner shall adjust the amount of each Tax Payment
previously made, and Tenant shall pay the amount of the adjustment on the next
rent installment date Immediately following receipt of a demand therefor from
Owner seeing forth the amount of the adjustment. If in any Tax Year the building
or the land is entitled to any abatement of or exemption from Taxes or BID
Charges (or any assessment or rate which comprises Taxes or BID Payment), such
abatement or exemption shall be taken into account In determining Tenant's Tax
Payment or BID Payment for that Tax Year.
(e) If Owner shall receive a refund of the Taxes or the BID
Charges for any Tax Year, Owner shall pay to Tenant Tenant's Share of the net
refund (after deducting from such total refund the costs and expenses of
obtaining same which have not previously been Included in Taxes or BID Charges
under this lease); but (i) such payment to Tenant shall not exceed Tenant's Tax
Payment or BID Payment actually paid for such Tax Year and (ii) if Tenant is
then in default in the payment of any fixed rent or additional rent, Owner shall
first apply that refund to the defaulted payments, if any.
44. Electric Energy. (a) Notwithstanding any provision of this lease
----------------
to the contrary, Owner shall have no obligation to supply to Tenant or the
demised premises any electric energy. Tenant shall, at Tenant's expense, make
all arrangements for electric energy to be furnished to the demised premises,
including, without limitation, the furnishing, Installing and maintaining of all
meters and other components of the electric energy system within or servicing
the demised premises. Owner shall not be liable to Tenant in damages or
otherwise for any failure of Tenant to make arrangements for or to obtain any
electric energy. Tenant shall not be released or excused from the performance of
any of its obligations under this lease for any such failure or for any
interruption or curtailment of any electric energy, and no such failure,
interruption or curtailment shall constitute a constructive or partial eviction.
Tenant shall not overload any electric energy facility. Notwithstanding anything
to the contrary contained in this lease, except as provided in Article 44(e),
without the prior consent of Owner, Tenant shall not make any Improvements,
alterations or additions to the electrical system of the building.
4
<PAGE>
(b) Tenant shall pay directly to the company, companies or
governmental units supplying electric energy to Tenant promptly as and when due,
all charges for electric energy used by Tenant or in connection with the demised
premises.
(c) Notwithstanding any provision of this lease to the contrary,
Tenant shall, at Tenant's expense, maintain and promptly make all repairs,
ordinary and extraordinary, to all components of the electric energy system
within or servicing the demised premises, including, without limitation, all
meters.
(d) Owner shall not be liable or responsible for any loss,
damage, or expense that Tenant may sustain or incur by reason of any change of
the company or companies supplying electric energy to the building (and to the
demised premises), including, without limitation, in connection with the
failure, interference or disruption in the supply of the electric energy
furnished to the demised premises, and no such change, failure, defect,
Interference or disruption shall constitute an actual or constructive eviction,
in whole or in part, or entitle Tenant to any abatement or diminution of rent or
additional rent, or relieve Tenant from any of its obligations Under this lease.
In the event that Tenant wishes to utilize the services of an alternative
electricity service provider (the "ASP") rather than the public utility that is
servicing the building, no such ASP shall be permitted to provide service to
Tenant or to Install its lines or other equipment within the building without
obtaining the prior consent of Owner, which shall not be unreasonably withheld
or delayed. Unless all of the following conditions are satisfied, it shall be
reasonable for Owner to refuse such consent:
(i) Owner shall incur no expense whatsoever with respect
to any aspect of the ASP's provision of its services, Including, without
limitation, the cost of Installation, service and materials;
(ii) Prior to commencement of any work in or about the
demised premises or the building by the ASP, the ASP shall supply Owner with
verification that, in Owner's reasonable judgment, the ASP is (1) properly
insured and (2) financially capable of paying any uninsured damage;
(iii) Prior to the commencement of any work in or about the
building by the ASP, the ASP shall agree in writing to abide by such rules and
regulations as reasonably determined by Owner;
(iv) Owner reasonably determines that there is sufficient
space in the building for the placement of all of the ASP's equipment and
materials, Including, without limitation, in the electricity risers;
(v) The ASP is licensed and reputable;
(vi) The ASP agrees, in a license agreement proposed by
Owner, to compensate Owner the reasonable amount determined by Owner for (1)
space used in the building for the storage and maintenance of the ASP's
equipment (the "ASP's Space") and (2) all costs that may be incurred by Owner in
arranging for access by the ASP's personnel, security for the ASP's equipment
and any other costs as Owner may incur in connection therewith;
(vii) The ASP agrees that Owner shall have the right to
inspect the ASP's performance of any work on or about the building, including,
without limitation, any installations or repairs; and
(viii) The ASP agrees that Owner shall have the right to
enter the ASP's Space at any time in the event of an emergency and, otherwise,
at all reasonable times and upon reasonable notice.
Owner's consent under this Article shall not be deemed any kind of warranty or
representation by Owner, including, without limitation, as to the suitability or
competence of the ASP. Tenant acknowledges that all electricity services desired
by Tenant shall be ordered and utilized at the sole expense of Tenant. Tenant
shall indemnify and hold harmless Owner for all losses, claims, demands,
expenses and judgments against Owner caused by or arising out of, either
directly or indirectly, any acts or omissions by the ASP. Notwithstanding
Tenant's rights to use an ASP, Owner shall have the right at any time and from
time to time to require Tenant to contract for electricity service with a
different ASP or ASPs; provided, that the use of the same shall lower Tenant's
electricity costs.
(e) Owner represents and warrants to Tenant that the existing
risers serving the demised premises are designed to supply (i) not less than 7
wafts demand load of electricity per rentable square foot (exclusive of HVAC)
and (ii) not less than 6 watts demand load of electricity per rentable square
foot for HVAC use. If, in Tenant's reasonable judgment, Tenant's reasonable
electrical requirements are in excess of the foregoing and necessitate
reasonable installations of additional electrical risers or other equipment,
Tenant shall notify Owner of this fact, and Owner shall, within a reasonable
period of time after such notice, make such reasonable installations. Tenant
shall pay Owner the costs for the same within 10
5
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days after rendition of a bill to Tenant therefor. Tenant shall, at the request
of Owner, provide to Owner such reasonable assurances as Owner shall request
with respect to Tenant's ability to pay such costs.
45. Additional Rent; Default Notices. Notwithstanding any provision
--------------------------------
of this lease to the contrary, (a) all sums of money, other than the fixed rent,
as shall become due from and payable by Tenant to Owner under this lease shall
be deemed to be additional rent, and (b) if Owner is prohibited by any law,
order, rule or regulation issued or promulgated by any governmental authority
having jurisdiction over same from sending to Tenant any notice of default
required to be sent pursuant to this lease, then (i) Tenant shall be deemed in
default under this lease on the date a default first occurs and (ii) as long as
the prohibition is in effect, Owner shall not be required to send any notice of
default under this lease for any reason, including, without limitation, to
enable Owner to draw on any security under this lease or to exercise any other
rights or remedies in connection with a default.
46. Survival. Any obligation of Owner or Tenant which by its nature
--------
or under the circumstances can only be, or by the provisions of this lease may
be, performed after the expiration or earlier termination of this lease, and any
liability for a payment which shall have accrued to or with respect to any
period ending at the time of such expiration or termination, unless expressly
otherwise provided in this lease, shall survive the expiration or earlier
termination of this lease. No delay by Owner in rendering any bill or statement
shall be deemed a waiver or release of Tenant's obligation to make the payment
reflected on that bill or statement.
47. Certain Restrictions. In addition to any other restrictions set
--------------------
forth in this lease, and notwithstanding anything to the contrary contained in
this lease, Tenant shall not (a) use any other area within or adjacent to the
building for the sale or display of any merchandise, for solicitations or
demonstrations or for any other business, occupation, undertaking or activity,
(b) store any trash or garbage in any area other than inside the demised
premises (and Tenant shall, at Tenant's sole cost and expense, attend to the
daily disposal of trash), (c) suffer, permit or commit any waste or any nuisance
or other act or thing in the demised premises which may unreasonably disturb any
other tenant or occupant in the building or permit any activity within or from
the demised premises which, in Owner's sole judgment, is obscene, pornographic
or lewd, (d) permit music or any other sounds in the demised premises to be
heard outside of the demised premises, (e) use or permit or suffer the use of
any machines or equipment in the demised premises which cause vibration or noise
that may be transmitted to or heard outside of the demised premises, (f) permit
odors or fumes beyond the demised premises, (g) to the extent possible, permit
its customers or delivery men to loiter immediately outside the demised premises
or the building, (h) except with Owner's prior consent or as otherwise expressly
permitted in this lease, place or install, or permit or suffer to be placed or
installed, or maintain, any sign upon or outside the demised premises or the
building, nor shall Tenant place or maintain on the glass of any window or door
of the demised premises, or inside the demised premises, any sign, decoration,
lettering, advertising matter, display (which can be seen from outside the
demised premises), shade or blind or other thing of any kind, (i) park trucks or
other delivery vehicles in other than authorized loading and unloading zones
(but then only for loading or unloading) so as to interfere with the use of any
driveways, walks or entrances, (j) place or install, or permit or suffer to be
placed, installed or maintained, any awning, canopy, banner, flag, pennant,
aerial, antenna or the like upon or outside the demised premises or the
building, (k) use any portion of the demised premises for the conduct of any
public auction, gathering, meeting or exhibition (except to the extent any
gathering, meeting or exhibition is typically conducted by companies involved in
computer related consulting), the rendering of any health or related services,
the conduct of a school, the conduct of any business or any use which results in
the presence of the general public in the demised premises, or in any other
manner which, in Owner's reasonable opinion, creates excessive traffic or use of
the building services, or (l) cause or permit, as the result of any intentional
or unintentional act or omission on the part of Tenant, its agents, employees,
tenants, subtenants or other occupants of the demised premises to release
Hazardous Substances (as defined in this Article) in or from any portion of the
demised premises in violation of any Environmental Laws. Tenant shall indemnify,
defend and hold harmless Owner, and its successors, assigns, and each of their
partners, employees, agents, officers and directors from and against any claims,
demands, penalties, fines, liabilities, settlements, damages, losses, costs or
expenses of whatever kind or nature, known or unknown, contingent or otherwise,
including, without limitation, reasonable attorneys' and consultants' fees and
disbursements and investigation and laboratory fees arising out of, or in any
way related to: (i) the presence, disposal, release or threat of release of any
Hazardous Substance as a result of any act or omission of Tenant, its agents,
employees, tenants, subtenants, invitees or other occupants of the demised
premises, in or from or affecting the demised premises; (ii) any personal injury
(including wrongful death) or property damage (real or personal) arising out of
or related to any such Hazardous Substance; (iii) any lawsuit brought or
threatened, settlement reached or government order relating to such Hazardous
Substance; and (iv) any violations of laws, orders, regulations, requirements or
demands or governmental authorities by Tenant. "Hazardous Substance" shall mean
"solid waste" or "hazardous waste", "hazardous material", "hazardous substance",
and "petroleum product" as defined in the Resource Conservation and Recovery
Act, the Comprehensive Environmental Response, Compensation and Liability Act,
the Hazardous Material Transportation Act, the Federal Water Pollution Control
Act and the Superfund Amendments and Reauthorization Act of 1986, any laws
relating to underground storage tanks, and any similar or successor federal law,
state law or local statutes and ordinances and any rules, regulations and
policies promulgated thereunder, as any of such federal, state and local
statutes, ordinances and regulations may be amended from time to time
(collectively, "Environmental Laws").
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48. Insurance. (a) Tenant, at its expense, shall maintain at all
---------
times during the term of this lease and at all times when Tenant is in
possession (and cause its subtenants or any other person or entity occupying any
portion of the demised premises by, through or under Tenant) at all times during
the term of this Lease and at all times when Tenant (or such other person or
entity) is in possession of the demised premises (i) commercial general
liability insurance in respect of the demised premises and the conduct or
operation of Tenant's business therein, with Owner, Owner's managing agent for
the building and the mortgagee(s) of the building, if any, as additional named
insureds, with a combined single limit (annually and per occurrence) of not less
than $3,000,000 and (ii) insurance (without deductible, unless Owner reasonably
consents to the same) covering all of Tenant's property, including, without
limitation, Tenant's furniture; fixtures, machinery, equipment and other
personal property and any property of third parties located in the demised
premises ("Tenant's Property") against all risks and perils for physical loss
and damage, including, without limitation, coverage for business interruption,
in an amount equal to 100 percent of the full replacement value of Tenant's
Property (as increased from time to time), the policy for which shall, if
obtainable (and subject to the payment of any additional premium by Owner as
provided in Article 9), contain a clause providing that the release or waiver
referred to in Article 9 shall not invalidate the insurance.
(b) Tenant shall deliver to Owner such policies or certificates
of such policies (in form reasonably acceptable to Owner) prior to the
commencement of the term of this lease (and with respect to any insurance
required by Owner pursuant to Article 3, prior to the commencement of any
alteration). Tenant shall procure and pay for renewals of such insurance from
time to time before the expiration thereof, and Tenant shall deliver to Owner
and any additional named insureds such renewal policy or certificate at least 30
thirty (30) days before the expiration of any existing policy. All such policies
(and all insurance required by Owner pursuant to Article 3) shall name as
additional named insureds Owner, Owner's managing agent for the building, the
mortgagee(s) of the building and any other persons or entities designated by
Owner (provided, that the naming of such other persons or entities shall not
require material expenditure of Tenant), shall be issued by companies reasonably
satisfactory to Owner and all such policies shall contain a provision whereby
the same cannot be canceled or modified unless Owner and any additional named
insureds are given at least 30 thirty (30) days' prior written notice of such
cancellation or modification, including, without limitation, any cancellation
resulting from the non-payment of premiums. Owner shall have the right at any
time and from time to time, but not more frequently than once every two years,
to require Tenant to increase the amount of the insurance maintained by Tenant
under this Article, as reasonably determined by Owner, provided that such amount
shall not exceed the amount which is comparable to the amount then generally
required of tenants in similar space in similar buildings in the general
vicinity of the building.
(c) Owner, at its expense (except as otherwise provided in this
lease), shall maintain insurance covering the building against loss or damage by
fire and such other risks as Owner shall determine, in such amounts, with such
companies and with such deductibles as Owner shall determine. The policy shall,
if obtainable (and subject to the payment of any additional premium by Tenant as
provided in Article 9), contain a clause providing that the release or waiver
referred to in Article 9 shall not invalidate the insurance.
(d) Any reference in this lease to Tenant's contractors shall
include, without limitation, all contractors, subcontractors, materialmen and
others performing any work in the demised premises for Tenant (other than
Tenant's employees), whether retained directly by Tenant or by any contractor.
49. Sale of Stock, Partnership Interests or Other Interests. Subject
-------------------------------------------------------
to Article 66(i), if at any time the original Tenant named herein or the then
Tenant shall be a corporation (whose shares are not traded on a recognized
United States stock exchange), partnership or other entity, any transfer of
voting stock, partnership interest or other interest resulting in the person or
persons who shall have owned a majority of such corporation's shares of voting
stock, general partners' interest or other voting interest, as the case may be,
immediately before such transfer, ceasing to own a majority of same (unless such
person or persons have and continue to retain the ability to control Tenant and
to direct the management of the day-to-day affairs of Tenant), except as the
result of transfers by inheritance, shall be deemed to be an assignment of this
lease as to which Owner's consent shall be required. The issuance of capital
stock of Tenant to the public on a nationally recognized stock exchange or over-
the-counter market shall not violate this Article.
50. Security Deposit. If Owner shall use, apply or retain the whole
----------------
or any part of the security deposit described in Article 32 (as reduced pursuant
to Article 67(e)) in accordance with the terms of this lease, Tenant shall upon
demand immediately deposit with Owner (in immediately available funds or, if the
security deposit is then in the form of a letter of credit, by replacement of
the letter of credit with a letter of credit complying with this lease or an
amendment to the existing letter of credit) a sum equal to the amount so used,
applied or retained, as security as aforesaid. In addition to any other right or
remedy of Owner, if Tenant shall default under this lease twice in any 12-month
period Owner may, by notice to Tenant, increase the security deposit by 10%.
Tenant shall pay such additional security deposit to Owner (in immediately
available funds or, if the security deposit is then in the form of a letter of
credit, by replacement of the letter of credit with a letter of credit complying
with this lease or an amendment to the existing letter of credit) within 10 days
after demand therefor.
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51. Arrears. If Tenant is in arrears in the payment of rent or
-------
additional rent, Tenant waives Tenant's right, if any, to designate the items
against which any payments made by Tenant are to be credited, and Tenant agrees
that Owner may apply any payments made by Tenant to any items Owner sees fit,
irrespective of and notwithstanding any designation or request by Tenant as to
the items against which any such payments shall be credited; provided, that such
payments are then due by Tenant.
52. Broker. Tenant represents to Owner that, to the best of its
------
knowledge, no broker other than Insigna/Edward S. Gordon Co., Inc. (the
"Broker") was instrumental in consummating this lease and that Tenant had no
conversations or negotiations with any broker, other than the Broker, concerning
the leasing of the demised premises. Owner represents to Tenant that Owner had
no conversations or negotiations with any broker, other than the Broker,
concerning the leasing of the demised premises to Tenant. Tenant agrees to
indemnify, defend and hold harmless Owner against and from any claims for any
brokerage commissions or other compensation arising out of any conversations or
negotiations had by Tenant with any broker other than the Broker concerning this
lease, and all costs, expenses and liabilities in connection therewith or in
connection with a breach of the foregoing representation by Tenant, including,
without limitation, reasonable attorneys' fees and expenses. Owner agrees to
indemnify, defend and hold harmless Tenant against and from any claims for any
brokerage commissions or other compensation arising out of any conversation or
negotiation had by Owner with any broker concerning this lease, and all costs,
expenses and liabilities in connection therewith or in connection with a breach
of the foregoing representation by Owner, including, without limitation,
reasonable attorneys' fees and expenses. Owner shall pay any commission due the
Broker pursuant to a separate agreement between Owner and the Broker.
53. No Owner Liability. Owner, its partners and principals, disclosed
------------------
or undisclosed, shall have no personal liability under this lease. Tenant shall
look only to Owner's interest in the land and the building (or the proceeds
thereof) for the satisfaction of Tenant's remedies for the collection of a
judgment (or other judicial process) requiring the payment of money by Owner in
the event of any default by Owner hereunder, and no other property or assets of
Owner or its partners or principals, disclosed or undisclosed, shall be subject
to lien, levy, execution or other enforcement procedure for the satisfaction of
Tenant's remedies under or with respect to this lease, the relationship of Owner
and Tenant hereunder or Tenant's use or occupancy of the demised premises. If
Tenant shall acquire a lien on such other property or assets by judgment or
otherwise, Tenant shall promptly release such lien by executing and delivering
to Owner any instrument, prepared by Owner, required for such lien to be
released.
54. Interpretation. Irrespective of the place of execution or
--------------
performance, this lease shall be governed by and construed in accordance with
the law of the State of New York. If any provision of this lease or the
application thereof to any person or circumstance shall, for any reason and to
any extent, be invalid or unenforceable, the remainder of this lease and the
application of that provision to other persons or circumstances shall not be
affected but rather shall be enforced to the extent permitted by law. This lease
shall be construed without regard to any presumption or other rule requiring
construction against the party causing this lease to be drafted. Each covenant,
agreement, obligation or other provision of this lease on Tenant's part to be
performed, shall be deemed and construed as a separate and independent covenant
of Tenant, not dependent on any other provision of this lease. All terms and
words used in this lease, regardless of the number or gender in which they are
used, shall be deemed to include any other number and any other gender as the
context may require. If Tenant consists of two or more business entities, the
obligations and liabilities of Tenant shall be joint and several.
55. Owner's Consent; Arbitration. If Tenant shall request Owner's
----------------------------
approval or consent and Owner shall fail or refuse to give such consent or
approval, Tenant shall not be entitled to any damages for any withholding or
delay of such approval or consent by Owner, it being intended that Tenant's sole
remedy shall be an action for injunction or specific performance and that such
remedy shall be available only in those cases where Owner shall have expressly
agreed in writing not to unreasonably withhold its consent or approval or where
as a matter of law Owner may not unreasonably withhold its consent or approval.
If a dispute shall arise under Article 42(g) or (a) Tenant shall request Owner's
consent or approval in connection with an assignment of this lease or a sublet
of the demised premises, and Owner has expressly agreed not to unreasonably
withhold Owner's consent or approval, (b) Owner denies its consent or approval
and (c) within 10 days following Owner's denial of consent or approval Tenant
shall give notice to Owner that Owner's denial was unreasonable (which notice
shall set forth the respects in which such denial was unreasonable), then either
party may apply to the New York office of the American Arbitration Association
to appoint an individual to determine (as the case may be) the dispute under
article 42(g) or whether Owner unreasonably withheld its consent or approval.
The individual must be a person who has experience in commercial real estate in
New York, New York for at least the past 15 years (and, in case of the dispute
under Article 42(g), shall have at least 15 years of experience with commercial
construction). The application shall request that such decision be made within
30 days (in case of arbitration with respect to an assignment or subletting, 15
days). If the American Arbitration Association or the appointed individual fails
or refuses to act within the required time period, either party may apply to the
President of the Real Estate Board of New York, Inc. for such determination. To
the extent the same are relevant to the decision of such individual, the
provisions of this lease shall apply. If such individual determines that either
(i) Owner's determination of the date of substantial completion of Owner's Work
was incorrect or (ii) Owner unreasonably denied its consent or approval (in
which case Owner shall be deemed to have given its consent or approval), then
Owner shall not be liable or responsible for, and such individual shall not
award, any costs, expenses, damages or losses whatsoever in
8
<PAGE>
connection with or arising out of the foregoing. The determination of such
individual shall be binding and conclusive on Owner and Tenant. All fees, cost
and expenses of the foregoing shall be paid by the parties equally, but each
party shall be responsible for its own attorney's and witness fees.
56. Interest. In addition to any other remedies Owner may have under
--------
this lease, Tenant shall pay to Owner interest at the lower of (a) highest rate
permitted by law or (b) 4% per annum above the prime commercial lending rate
from time to time announced by The Chase Manhattan Bank in New York, New York on
any rent or additional rent paid more than ten days after the same is due, which
interest shall be paid for the period commencing on the date such rent or
additional rent was first due and ending on the date the same is paid.
57. Execution of Lease. Notwithstanding any provision of this lease,
------------------
or any law or rule, to the contrary, or the execution of this lease by Tenant,
this lease shall not bind Owner or Tenant, nor shall Owner or Tenant be
permitted the benefits of this lease, unless and until one or more counterparts
of this lease are executed by Owner and Tenant and delivered to Owner and
Tenant.
58. Managing Agent. Any bill, statement, notice or communication
--------------
given by Owner to Tenant in accordance with Article 28 may be signed and
delivered by the managing agent of the building with the same force and effect
as if signed and delivered by Owner. Until Owner shall give notice to Tenant of
a change, the managing agent of the building shall be Insignia/Edward S. Gordon
Co., Inc.
59. Security Interests. Tenant shall not grant or create, or permit
------------------
to be created, any security interest in or lien upon any fixtures, installed or
placed in the demised premises by Tenant or Owner.
60. Air Conditioning. Notwithstanding any provision of this lease to
----------------
the contrary, except as provided in Article 42, Owner shall have no obligation
to furnish to Tenant or the demised premises any air conditioning. Any air-
conditioning unit and equipment located in the demised premises on the date the
term of this lease shall commence or furnished and installed by Owner pursuant
to Article 42 may be utilized by Tenant; provided that Owner shall have no
obligation with respect thereto and that Tenant shall accept the same in its "AS
IS" condition. Tenant shall, at its sole cost and expense (a) maintain and
promptly make all repairs, structural or otherwise, ordinary and extraordinary,
to all components of the air-conditioning system within the demised premises,
(b) maintain, and prior to the commencement of the term deliver to Owner, a full
service contract covering the air conditioning system located at the demised
premises with a company reasonably acceptable to Owner and (c) pay all permit
fees and other costs associated with any air-conditioning units in the demised
premises. Tenant shall not be released or excused from the performance of any of
its obligations under this lease for any failure or for interruption or
curtailment of any air conditioning, for any reason whatsoever, and no such
failure, interruption or curtailment shall constitute a constructive or partial
eviction.
61. Rent Control. If the fixed rent or any additional rent shall be
------------
or become uncollectible by virtue of any law, governmental order or regulation,
or direction of any public officer or body pursuant to law, Tenant shall enter
into such agreement or agreements and take such other action as Owner may
request, as may be legally permissible, to permit Owner to collect the maximum
fixed rent and additional rent which may from time to time during the
continuance of such rent restriction be legally permissible, but not in excess
of the amounts of fixed rent and additional rent payable under this lease. Upon
the termination of such rent restriction prior to the expiration of the term of
this lease (a) the fixed rent and additional rent, after such termination, shall
become payable under this lease in the amount of the fixed rent and additional
rent set forth in this lease and (b) Tenant shall pay to Owner, if legally
permissible, an amount equal to (i) the fixed rent and additional rent which
would have been paid pursuant to this lease, but for such rent restriction, less
(ii) the fixed rent and additional rent paid by Tenant to Owner during the
period that such rent restriction was in effect.
62. Holding Over. If the demised premises are not surrendered and
------------
vacated as and at the time required by this lease (time being of the essence),
Tenant shall be liable to Owner for (a) all losses, costs, liabilities and
damages which Owner may incur by reason thereof, including, without limitation,
reasonable attorneys' fees, and Tenant shall indemnify, defend and hold harmless
Owner against all claims made by any succeeding tenants against Owner or
otherwise arising out of or resulting from the failure of Tenant timely to
surrender and vacate the demised premises in accordance with the provisions of
this lease, and (b) per diem use and occupancy in respect of the demised
premises equal to two times the fixed rent and additional rent payable under
this lease for the last year of the term of this lease (which amount Owner and
Tenant presently agree is the minimum to which Owner would be entitled, is
presently contemplated by them as being fair and reasonable under such
circumstances and is not a penalty). In no event, however, shall this Article be
construed as permitting Tenant to hold over in possession of the demised
premises after the expiration or termination of the term of this lease.
63. Tenant's Work. (a) Subject to the provisions of this Article,
-------------
Article 3, all other provisions of this lease, and the rules and regulations of
the building now or hereafter in effect, Owner's consent to the performance by
Tenant of work ("Tenant's Work") consisting of nonstructural alterations to the
demised premises in accordance with Tenant's Plans (as defined below) shall not
be unreasonably withheld or delayed, provided that (i) Tenant is not then in
default under this lease, (ii) Tenant's Work is not structural, (iii) the
outside appearance of the building shall not be affected, (iv) Tenant's Work
shall not affect any
9
<PAGE>
structural part of the building, (v) no part of the building outside of the
demised premises shall be affected, (vi) the mechanical, electrical, plumbing
and other service and utility systems of the building shall not be affected, and
(vii) Tenant's Work shall comply with the applicable provisions of this lease
and law. Any Tenant's Work which is required to be performed by Tenant pursuant
to any provision of this lease which is structural or which affects any
mechanical, electrical, plumbing or other service or utility system of the
building shall be performed in accordance with this Article and all other
applicable provisions of this lease, or may, at Owner's option, be performed by
Owner at Tenant's expense (in which event, Tenant shall pay Owner in
installments, in advances, as the work progresses).
(b) Prior to the commencement of any Tenant's Work requiring
Owner's' approval, Tenant shall submit to Owner for its approval two sets of
complete plans, drawings and specifications, suitable for filing ("Tenant's
Plans"), including, without limitation, all mechanical, electrical, air
conditioning and other utility systems and facilities, for such Tenant's Work,
prepared by an architect and/or engineer duly licensed in the State of New York.
Within 15 days following Owner's receipt of Tenant's Plans, Owner shall review
or cause the same to be reviewed and shall thereupon return to Tenant one set of
Tenant's Plans with Owner's approval (which shall not be unreasonably withheld
or delayed) or disapproval noted thereon, and if same shall be disapproved in
any respect Owner shall state the reasons for such disapproval. If Owner shall
not approve Tenant's Plans Tenant shall, within five days of receipt thereof,
cause its architect or engineer to make such changes to Tenant's Plans as Owner
shall require and shall thereupon resubmit the same to Owner for its approval.
To the extent required pursuant to any mortgage affecting the building, Tenant's
Plans shall also be subject to the prior approval of the holder of such
mortgage. Following the approval of Tenant's Plans, the same shall be final and
shall not be changed by Tenant without the prior approval of Owner, which shall
not unreasonably be withheld or delayed (and such mortgagee, if required),
except as may be required by law. Tenant shall give prior notice to Owner of any
changes required by law and shall furnish Owner (and such mortgagee, if
required) with copies of all such required changes in Tenant's Plans. Owner's
approval of Tenant's Plans or of any revisions shall not constitute an opinion
or agreement by Owner that the same are structurally sufficient or the Tenant's
Plans are in compliance with law, nor shall such approval impose any present or
future liability on Owner or waive any of Owners' rights under this lease.
Owner's approval of Tenant's Plans shall be conditioned upon Tenant employing
licensed persons and firms (where required by law) and labor for the performance
of Tenant's Work so as not to cause any jurisdictional or other labor disputes
in the building. In any event, all contractors Tenant proposes to employ shall
be bondable and shall be subject to Owner's prior approval, which will not be
unreasonably withheld or delayed. Such approval shall be requested by Tenant
prior to the commencement of any Tenant's Work. Notwithstanding the foregoing,
Tenant or the general contractor to be employed by Tenant to perform Tenant's
Work shall employ a subcontractor as shall be approved by Owner to perform the
electrical work (and all future electrical work), and the contract to be entered
into between Tenant and the approved general contractor shall so provide.
(c) Promptly following Owner's approval of Tenant's Plans (if
required), and, in any event, with respect to the performance of any Tenant's
Work, Tenant shall secure or cause to be secured, at Tenant's expense, all
necessary approvals of Tenant's Plans from all governmental authorities having
jurisdiction and all permits and licenses necessary to perform Tenant's Work.
Prior to the commencement of any Tenant's Work, Tenant shall furnish Owner with
copies of Tenant's Plans as approved by such governmental authorities and copies
of such permits and licenses; provided, however, that the filing of any
applications with any governmental authorities for such approval or for any
permits or licenses required to perform Tenant's Work shall be done (if the same
may be performed for a reasonable fee) by Rethy Associates, Inc. or another
person or entity reasonably designated by Owner. Prior to such filing, Tenant
shall submit copies of such applications to Owner for its approval, which shall
not unreasonably be withheld or delayed.
(d) Upon Tenant having secured the approvals from Owner (if the
same requires Owner's approval) and from governmental authorities as required
under this Article, Tenant shall promptly (i) enter into a construction contract
in form and substance approved by Owner, which approval shall not be
unreasonably withheld or delayed, and shall otherwise comply with the terms of
this lease, with a general contractor and/or construction manager approved by
Owner pursuant to this lease and (ii) furnish Owner with a copy of such executed
Contract.
(e) Following compliance by Tenant with its obligations under the
foregoing provisions of this Article, Tenant shall promptly commence or cause to
be commenced Tenant's Work and shall complete or cause the same to be completed
with reasonable diligence, in a first-class, workmanlike manner in accordance
with the approved Tenant's Plans (if applicable), all necessary licenses and
permits, this lease, all applicable laws, ordinances and regulations of all
governmental and insurance authorities and all applicable requirements of the
Board of Fire Underwriters. All of Tenant's Work shall be performed in a manner
so as to cause no inconvenience or disturbance to other tenants or contractors
in the building. Any heavy demolition work, core drilling or other slab
penetrations to be performed by Tenant as part of Tenant's Work shall be
performed on business days before 8:00 A.M. or after 6:00 P.M. Tenant shall
cause all construction work to be performed in a reasonable manner and shall
comply with the Rules and Regulations for the building (including, without
limitation, the payment of charges for services).
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(f) Tenant's Work shall not include any structural changes to the
demised premises or to the building or impair the structural soundness thereof,
and all of Tenant's Work shall be performed within the demised premises.
Tenant's Work shall in no event interfere with or impair the use of other
portions of the building or its services, including, without limitation, the
plumbing, heating, ventilating, air conditioning and electrical systems, by
Owner or other occupants of the building.
(g) Tenant shall pay its contractors, laborers, subcontractors,
materialmen and suppliers in accordance with their respective agreements with
Tenant, shall not cause or suffer any liens, mortgages, chattel liens, or other
title retention or security agreements to be placed on the demised premises, any
improvements therein or the building. Nothing contained in this Article or
elsewhere in this lease shall be construed in any way as constituting any
consent or authorization to Tenant to subject the land or the building or any
part of the land or the building or any improvements or other personal property
therein or the interest or estate of Owner or of the lessor under any underlying
lease to any lien or charge in respect of Tenant's Work. All contracts or
agreements made by Tenant with any third party for the furnishing of any labor
or materials in connection with Tenant's Work (or any other work or alterations
by Tenant) shall expressly provide that the contractor or materialman shall look
solely to Tenant for the payment of any labor or materials furnished to the
demised premises pursuant to such contract or agreement and that neither Owner
nor the lessor under any underlying lease shall have any responsibility or
liability for the payment thereof.
(h) Promptly following the completion of Tenant's Work, Tenant
shall obtain and submit to Owner copies of all final governmental and fire
underwriters' approvals or certificates evidencing the completion thereof in
compliance with all governmental and fire underwriters' requirements.
(i) Upon the completion of Tenant's Work and the approval thereof
by Tenant's architect and, if required by Owner for Tenant's Work requiring
Owner's consent, Owner's architect, Tenant shall deliver to Owner the general
contractor's affidavit to the effect that (i) all work and materials have been
completed and/or installed in accordance with Tenant's Plans (if applicable), or
any such changes thereto which Owner may have previously approved, and (ii) all
laborers, materialmen and subcontractors employed by the general contractor have
been paid in full except for any payments to be made from Owner's payment set
forth in Article 42, which affidavit shall be accompanied by lien releases from
all such parties and/or such other data establishing payment or satisfaction of
all other obligations in respect of Tenant's Work.
(j) Nothing contained in this Article shall limit the provisions
of Article 3 or any other provisions of this lease, except as specifically set
forth in this Article. The provisions of this Article are in addition to the
provisions contained in Article 3 and elsewhere in this lease.
64. Americans With Disabilities Act (the "ADA"); Local Law No. 5 of
---------------------------------------------------------------
1973, as amended (the "Law"). All of Owner's Work shall be performed, at Owner's
----------------------------
expense, in compliance with the ADA and the Law. Tenant shall, subject to all of
the provisions of this lease, comply with all aspects of the ADA and the Law, as
now or hereafter constituted, with respect to the demised premises, whether or
not such compliance is required as the result of Tenant's business, Tenant's
work, Tenant's use or manner of use of the demised premises or the building
(including the use permitted under this lease), or Tenant's method of operation
or whether or not such compliance requires structural changes to the demised
premises. If Tenant's business, Tenant's work, Tenant's use or manner of use or
Tenant's method of operation requires changes to any portion of the building
(exclusive of the demised premises) in order to comply with the ADA or the Law,
either (i) Tenant shall discontinue the same within 30 days after notice from
Owner, or (ii) after the expiration of such 30-day period, if Tenant shall not
have discontinued the same, Owner shall have the option of either terminating
this lease (in which event this lease shall end on the 30th day following
Owner's notice of termination and Tenant shall vacate the demised premises on
such date, without further liability or obligation of Owner or Tenant, beyond
that date) or performing those changes at Tenant's expense (in which event,
Tenant shall pay Owner for the expense of the changes, plus 15% of the expense,
in installments, in advance, as the work is performed).
65. Confidentiality. Tenant shall hold in confidence and shall not
---------------
disclose to third parties, and shall cause its officers, directors, employees,
representatives, brokers, attorneys and advisers to hold in confidence and not
disclose to third parties, this lease and its terms, as hereby or hereafter
amended, and any information relating to Owner or the building, if any, provided
by Owner to Tenant in connection with this lease, as hereby or hereafter amended
(collectively, the "Information"), except to the extent any information (a) must
be disclosed by order of any court or regulatory agency, or by law (b) is
publicly known or becomes publicly known other than through the acts of Tenant,
or any of its officers, directors, employees, representatives, brokers,
attorneys or advisers, or (c) must be disclosed by Tenant in connection with any
financing or sale, any subletting of the demised premises, or any assignment of
this lease, as hereby or hereafter amended, by Tenant.
66. Assignment and Subletting. (a) Notwithstanding the provisions of
-------------------------
Article 11, if Tenant shall at any time during the term of this lease desire to
assign this lease or sublet all of the demised premises or any portion thereof,
Tenant shall give notice thereof to Owner, which notice shall be accompanied by
(i) a conformed or photostatic copy of the proposed assignment or sublease, the
effective or commencement date of which shall be at least 30 days after the
giving of such notice, (ii) a statement setting forth in reasonable detail the
identity of the proposed assignee or subtenant, the nature of its business and
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<PAGE>
its proposed use of the demised premises, and (iii) current financial
information with respect to the proposed assignee or subtenant, including,
without limitation, its most recent financial report. In case of an assignment
of this lease or a sublet of all of the demised premises or all of any one floor
of the same for all or substantially all of the balance of the term of this
lease, such notice shall be deemed an offer from Tenant to Owner whereby Owner
may, at its option, terminate this lease (or, in case of a subletting, terminate
this lease as to the portion of the demised premises which Tenant is proposing
to sublet). Said option may be exercised by Owner by notice to Tenant at any
time within 30 days after such notice has been given by Tenant to Owner, and
during such 30-day period Tenant shall not assign this lease or sublet such
Space to any person.
(b) If Owner exercises its option to terminate this lease, this
lease (as to the portion of the demised premises which Tenant proposes to assign
on sublet) shall end and expire on the date that such assignment or sublet was
to be effective or commence, as the case may be, Tenant shall vacate the
affected portion of the demised premises on or before such date, and the fixed
rent and additional rent shall be paid and apportioned to such date and
thereafter the fixed rent and additional rent shall be equitably apportioned
based upon the demised premises remaining.
(c) If Owner does not exercise its option pursuant to paragraph
(a) of this Article, provided Tenant is not then in default under this lease
following any required notice and the expiration of any applicable cure period,
Owner's consent to the proposed assignment or sublease shall not be unreasonably
withheld or delayed, provided and upon condition that:
(i) Tenant shall have complied with the provisions of
paragraph (a) of this Article;
(ii) In Owner's reasonable judgment the proposed assignee
or subtenant is reputable and engaged in a business and the demised premises
will be used in a manner which is in keeping with the then standards of the
building;
(iii) The proposed assignee or subtenant is not any of the
following: an employment or travel agency (or offices therefor); government or
quasi-government agency or department thereof or owned in whole or in part by a
government or quasi-government agency or department thereof (or offices
therefor); foreign airline; charity, not-for-profit organization or other
organization dependent in whole or in part on charitable contributions (or
offices therefor); or any person or entity who shall create, in Owner's
reasonable opinion, any traffic or use of the building services amounting to a
material increase above the then current traffic or use of building services;
(iv) The proposed assignee or subtenant is not then an
occupant of any part of the building;
(v) The proposed assignee or subtenant is not a person
with whom Owner is then negotiating (or with whom Owner has within the prior
six-month period negotiated) a lease for comparable space with a comparable term
in the building;
(vi) The form of the proposed sublease or assignment shall
be in form reasonably satisfactory to Owner and shall comply with the applicable
provisions of this Article;
(vii) The rental and other terms and conditions of the
sublease are the same as those contained in the proposed sublease furnished to
Owner pursuant to paragraph (a) of this Article;
(viii) Tenant shall reimburse Owner on demand for any
reasonable costs that may be incurred by Owner in connection with said
assignment or sublease, including, without limitation, legal costs incurred in
connection with the granting of any requested consent;
(ix) Tenant shall not have (1) advertised or publicized in
any way (excluding a listing with a broker) the availability of the demised
premises without prior notice to and reasonable approval by Owner, nor shall any
advertisement state the name (as distinguished from the address) of the building
or the proposed rental, or (2) listed the demised premises for subletting,
whether through a broker, agent, representative, or otherwise at a rental rate
less than the greater of (x) the fixed rent and additional rent then payable
hereunder for such space, or (y) the fixed rent and additional rent at which
Owner is then offering to lease other space in the building; and
(x) in case of a proposed subletting of a portion of any
one floor of the demised premises, Owner shall have approved (which approval
shall not be unreasonably withheld or delayed) of any work to be performed by
Tenant to physically separate the sublet premises from the balance of the
demised premises.
(d) Each subletting pursuant to this Article shall be subject to
all of the covenants, agreements, terms, provisions and conditions contained in
this lease. Notwithstanding any such subletting or assignment and/or acceptance
of rent or additional rent by Owner from any subtenant or
12
<PAGE>
assignee, Tenant shall and will remain fully liable for (and any assignee shall
assume the obligation for) the payment of the fixed rent and additional rent due
and to become due hereunder and for the performance of all the covenants,
agreements, terms, provisions and conditions contained in this lease on the part
of Tenant to be performed and all acts and omissions of any licensee, subtenant,
assignee or anyone claiming under or through any subtenant or assignee which
shall be in violation of any of the obligations of this lease, and any such
violation shall be deemed to be a violation by Tenant. Tenant further agrees
that notwithstanding any such subletting Or assignment, no other and further
subletting of the demised premises or assignment by Tenant or any person
claiming through or under Tenant shall or will be made except upon compliance
with and subject to the provisions of this Article. If Owner shall decline to
give its consent to any proposed assignment or sublease, or if Owner shall
exercise its option under paragraph (a) of this Article, Tenant shall indemnify,
defend and hold harmless Owner against and from any and all loss, liability,
damages, costs and expenses (including reasonable counsel fees) resulting from
any claims that may be made against Owner by the proposed assignee or subtenant
or by any brokers or other persons claiming a commission or similar compensation
in connection with the proposed assignment or sublease.
(e) If (i) Owner fails to exercise its option under paragraph (a)
of this Article and consents to a proposed assignment or sublease, and (ii)
Tenant fails to execute and deliver the assignment or sublease to which Owner
consented within 45 days after the giving of such consent, then Tenant shall
again comply with all of the provisions and conditions of paragraph (a) of this
Article before assigning this lease or subletting all of the demised premises.
(f) With respect to each and every sublease or subletting, it is
further agreed:
(i) No subletting shall be for a term ending later than one
day prior to the expiration date of this lease.
(ii) No sublease shall be valid, and no subtenant shall take
possession of the demised premises or any part thereof, until an executed
counterpart of such sublease has been delivered to Owner.
(iii) Each sublease shall provide that it is subject and
subordinate to this lease and to the matters to which this lease is or shall be
subordinate, and that in the event of termination, re-entry or dispossess by
Owner under this lease Owner may, at its option, take over all of the right,
title and interest of Tenant, as sublessor, under such sublease, and such
subtenant shall, at Owner's option, attorn to Owner pursuant to the then
executory provisions of such sublease, except that Owner shall not (1) be liable
for any previous act or omission of Tenant under such sublease, (2) be subject
to any offset, not expressly provided in such sublease, which theretofore
accrued to such subtenant against Tenant, or (3) be bound by any previous
modification of such sublease or by any previous prepayment of more than one
month's rent.
(g) If Owner shall give its consent to any assignment of this
lease or to any sublease, Tenant shall in consideration therefor, pay to Owner,
as additional rent:
(i) in the case of an assignment, an amount equal to 50% of
all sums and other consideration paid to Tenant by the assignee for or by reason
of such assignment (less all reasonable and customary expenses of Tenant
incurred solely in connection with such assignment); and
(ii) in the case of a sublease, 50% of any rents, additional
charges or other consideration payable under the sublease to Tenant by the
subtenant which is in excess of the fixed rent and additional rent accruing
during the term of the sublease (less all reasonable and customary expenses of
Tenant incurred solely in connection with such sublease). The sums payable under
this paragraph shall be paid to Owner as and when paid by the subtenant to
Tenant.
(h) The use of the demised premises by third parties with whom
Tenant does business shall not be deemed a sublet of the demised premises and
shall not require Owner's consent; provided, that (i) such third-parties only
use immaterial portions of the demised premises and (ii) such use, in Owner's
reasonable opinion, does not create any traffic amounting to a material increase
above the then current traffic. Such third-party occupants shall be subject to
the terms and provisions of this lease.
(i) Notwithstanding anything contained in Articles 11, 49 or 66
or any other provision of this lease to the contrary (but subject to compliance
with the first sentence of Article 66(a), and provided that Tenant is not then
in default under this lease following any required notice and the expiration of
any applicable cure period), Tenant may, without Owner's consent and without any
right of Owner to recapture the demised promises or any portion thereof, assign
this lease or sublet all or any portion of the demised premises to any Affiliate
(as hereinafter defined) of Tenant or any successor to Tenant by merger,
consolidation or other business combination or a person to whom all or
substantially all of Tenant's assets and businesses are transferred (such a
successor or person being called a "Successor"); provided, that (i) in case of
an assignment to an Affiliate of Tenant or a Successor, the assignee has a net
worth equal to or greater than $20,000,000 (as reasonably demonstrated to Owner)
and (ii) the condition specified in Article 66(c)(ii) has been fulfilled. Owner
shall not be entitled to any portion of any profits received by Tenant for an
assignment or sublet to an Affiliate or a Successor. For purposes of this
Article, the term "Affiliate" of Tenant
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<PAGE>
shall mean any corporation or other entity which, directly or indirectly,
controls or is controlled by or is under common control with Tenant.
(j) The consent of Owner specified in this Article shall be
subject to the applicable provisions of Article 55.
67. Letter of Credit for Security Deposit. (a) In lieu of a cash
-------------------------------------
security deposit required pursuant to Article 32, Tenant may deposit with Owner
a clean, unconditional and irrevocable letter of credit issued by a bank that is
a member of the federal reserve system having an office in the City of New York
at which drawings of the letter of credit will be honored and otherwise
acceptable to Owner, in the required amount, containing the terms and otherwise
in the form of Exhibit A attached to this lease, which letter of credit shall be
---------
held and drawn by Owner in accordance with Article 32, Article 50 and this
Article.
(b) If the bank issuing the letter of credit (or any confirmation
of the letter of credit) shall notify Owner that the term of the letter of
credit (or any confirmation of the letter of credit) shall not be renewed, or if
the letter of credit (or any confirmation of the letter of credit) shall, at any
time during the term of the lease, have a term of less than 30 days, then if at
least 30 days prior to the applicable expiration date of the letter of credit or
the confirmation of the letter of credit (as the case may be) (or any
replacement thereof, as the case may be), Tenant shall not (i) replace the
letter of credit with a new letter of credit issued in accordance with this
Article and Exhibit A attached to this lease (having an initial expiration date
---------
at least one year from the date of the new letter of credit or (ii) replace the
letter of credit with a security deposit of immediately available funds, or if
Tenant shall otherwise default under this lease, Owner shall have the right to
immediately draw the full amount of the letter of credit (to be held and used in
accordance with this lease). If Tenant fails to comply with this paragraph and
the letter of credit (or any confirmation of the letter of credit) shall expire
prior to Owner's drawing the full amount thereof, then, Tenant shall be deemed
in default under this lease and Owner shall have all of its rights and remedies,
including, without limitation, the right to terminate this lease in accordance
with the provisions of this lease.
(c) If, for any reason whatsoever other than Owner's failure to
comply with the requirements of the letter of credit, the bank issuing the
letter of credit (or any confirmation of the letter of credit) shall fail or
refuse to honor any draft, then unless Tenant shall within five days following
notice by Owner to Tenant of such failure or refusal either (i) pay to Owner a
sum equal to the letter of credit or (ii) replace the letter of credit with a
new letter of credit issued in accordance with this Article and Exhibit A
---------
attached to this lease (having an initial expiration date at least one year from
the date of the new letter of credit), Tenant shall be deemed in default under
this lease and Owner shall have all of its rights and remedies, including,
without limitation, the right to terminate this lease in accordance with the
provisions of this lease.
(d) If Owner or any subsequent owner shall convey its interest,
Tenant shall, at the request of the transferor or transferee, replace or amend
the letter of credit, within 10 days following such request, so that the
transferee is named as the beneficiary. If such replacement or amendment is not
received within said 10-day period, Tenant shall be deemed in default under this
lease and, in addition to any other rights or remedies of Owner, the transferor
or transferee may draw on the letter of credit and hold the proceeds as security
under this lease. Any transfer fee or charge imposed by the issuing bank shall
be reimbursed to Owner (or paid, at Owner's option) by Tenant within 10 days
following Owner's request.
(e) Provided Tenant has not been in default under this lease
following any required notice and the expiration of any applicable cure period
the security deposit shall be reduced (by replacement of the letter of credit
with a letter of credit complying with this Article or an amendment to the
existing letter of credit) (i) by $50,000 on the 2nd, 3rd and 4th anniversaries
of the 4th Floor Rent Commencement Date; provided, that in no event shall the
security deposit be less than the amount provided in the other clauses of this
Article 67(e), and the same shall be subject to any increase required pursuant
to Article 50, (ii) to an amount equal to $175,000 on the 5th anniversary of the
4th Floor Rent Commencement Date (subject to increases in the security deposit
as specified in Article 50) and (iii) to an amount equal to $175,000 on the date
Tenant issues capital stock to the public and such stock is publicly traded on a
nationally recognized stock exchange or over-the-counter market (subject to
increases in the security deposit as specified in Article 50). Notwithstanding
anything to the contrary contained in this lease, in no event shall the security
deposit under this lease be less than $175,000. Owner shall promptly sign any
authorization or confirmation reasonably required by the bank which issued the
letter of credit or, if applicable, any correspondent New York bank for such
issuing bank in order to reduce the balance of the letter of credit to reflect
the reduction of the security deposit as set forth above, subject to the terms
of this paragraph (e), and Owner shall reasonably cooperate with Tenant in
effecting such a reduction in the balance of the letter of credit.
68. Nondisturbance Agreement; Owner represents to Tenant that there
-------------------------
is no mortgage or ground lease affecting the building on the date of this lease.
Owner shall obtain and deliver to Tenant a nondisturbance agreement in favor of
Tenant from any future mortgagee or ground landlord. Owner's default under this
Article shall not affect Tenant's obligations under this lease; provided, that
Tenant shall be able to pursue a damage action against Owner on account of such
default. Owner represents and warrants to Tenant that Owner is a general
partnership and Edward S. Gordon is a general partner of Owner.
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69. Access. Subject to the provisions of this lease, Tenant shall
------
have access to the building and the demised premises, 24 hours per day, seven
days per week.
70. Signs. Subject to and in accordance with this lease, all the
-----
rules and regulations, any Landmarks Commission requirements, and Owner's
reasonable approval as to location, size, configuration, color and all other
aspects of same, Tenant shall have the right (if permitted by law and the
Landmarks Commission), to install one tasteful identification sign in the lobby
of the building and one tasteful identification sign on the exterior of the
building.
71. Zoning. Owner does not represent, warrant or guarantee that
------
Tenant's use or occupation of the demised premises or the nature of the business
to be conducted by Tenant at the demised premises is either lawful or
permissible under any applicable zoning ordinance for the district in which the
building is located.
72. No Residential Use. Tenant shall not install any residential
------------------
fixtures or appliances in the demised premises or arrange or appear to arrange
the demised premises for living. Tenant represents and warrants to Owner that
under no circumstances will it use or permit the use of the demised premises or
any portion thereof for residential purposes, or otherwise in violation of
Article 2 of this lease. No animal of any kind or nature whatsoever shall be
kept or harbored in the demised premises.
73. Locks. Tenant shall at all times supply Owner with a key to all
-----
locks providing entrance to the demised premises or any part thereof. If Tenant
changes any locks, Owner shall promptly be given a set of keys for the new lock.
Notwithstanding the foregoing, Tenant shall not be permitted to install any new
lock without the prior reasonable consent of Owner.
74. Financing. If, in connection with obtaining financing for the
---------
land and/or the building, a lender shall request reasonable modifications to
this lease as a condition to such financing, Tenant shall consent to such
modifications; provided, that such modifications do not materially increase the
obligations of Tenant under this lease or materially and adversely affect the
leasehold interest of Tenant created by this lease; provided, further, that
Tenant shall not be obligated to Incur material out-of-pocket expenses in
connection with such modifications (unless Owner agrees to pay the same).
75. Right of First Offer. Provided that Tenant shall not then be in
--------------------
default under this lease, if Owner shall desire to lease any portion of the
space (the "Affected Space") on the 2nd floor of the building for non-retail
uses during the first 8 years of the term of this lease, Owner shall notify
Tenant of the same. Such notice shall be accompanied by (a) a sketch of the
Affected Space and (b) the terms and conditions under which Owner would be
willing to lease the Affected Space (the financial aspects of such terms and
conditions shall be comparable to those of similarly situated premises in
similar situations). Tenant shall have the right, within 15 days after such
notice from Owner (time being of the essence) to lease such Affected Space upon
the terms and conditions offered in such notice from Owner. If (i) Tenant elects
not to so lease such Affected Space or does not respond within such 15-day
period (time being of the essence) or (ii) an amendment to this lease on
reasonable terms (incorporating the terms and conditions referred to above)
delivered to Tenant by Owner within 5 days of Owner's receipt of Tenant's
acceptance to effectuate such leasing is not executed and delivered by Tenant
within 20 days following the end of such 15-day period, Owner may (at any time
thereafter) negotiate and execute and deliver a lease covering the Affected
Space on any terms and conditions. Tenant shall be offered the Affected Space
only once pursuant to this Article. Notwithstanding anything to the contrary
contained in this lease, Owner may lease any portion of the 2nd floor free of
the provisions of this Article (even after an offer has been made to Tenant
under this Article) to a tenant for retail use.
15
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EXHIBIT A
---------
LETTER OF CREDIT
----------------
,19__
Letter of Credit No. ______
To: Lautob Realty Company
860 Broadway
New York, New York
By order of: Scient Corporation
860 Broadway
New York, New York
Gentlemen:
We hereby establish our irrevocable credit in your favor, for the
account indicated above, for a sum or sums not exceeding in all $___________;
available by your drafts at sight on us.
Each draft must be accompanied by a statement signed by a general
partner of Lautob Realty Company stating that: "The drawing is in accordance
with a lease dated as of October __, 1998, as the same may have been amended,
between Lautob Realty Company, as owner, and Scient Corporation, as tenant."
All drafts under this Letter of Credit must bear on their face
the clause "Drawn under [name of bank], New York, New York, Credit No ________."
More than one drawing may be made under this Letter of Credit
provided the aggregate amount of all such drawings does not exceed the aggregate
amount of this Letter of Credit.
This Letter of Credit may be transferred in its entirety by
Lautob Realty Company or any transferee. Upon any such transfer, the drafts and
the statement required by this Letter of Credit shall be signed by the
transferee.
This Letter of Credit shall be automatically extended for periods
of one (1) year from the then relevant expiry date through December 31,2011,
unless you are notified by us in writing at least thirty (30) days prior to each
annual expiry date that this Letter of Credit is not being extended.
We hereby agree with you that drafts drawn under and in
accordance with this Letter of Credit will be duly honored upon presentation of
documents as herein specified if presented at the office of [name and address of
bank], no later than December 31, 1999, unless this date is automatically
extended pursuant to this Letter of Credit, in which event such date shall be
the then relevant expiry date.
This Letter of Credit is subject to the Uniform Customs and
Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500.
Very truly yours,
__________________________
Authorized Signature
16